Question

Brief Exercise 9-3 Paige Company estimates that unit sales will be 10,500 in quarter 1, 12,400 in quarter 2, 14,700 in quarter 3, and 19,100 in quarter 4. Management desires to have an ending finished goods inventory equal to 24% of the next quarter's expected unit sales. Prepare a production budget by quarters for the first 6 months of 202o PAIGE COMPANY Production Budget Quarter Six Months 1 2

Answer 1

PAIGE COMPANY Production Budget For the first 6 Months of 2020 Quarter 1 | Quarter 2 Sales in units 10,500 12,400 Desired ending inventory 2,976 3,528 Total needs 13,476 15,928 Less: Beginning inventory 2,520 2,976 Units to be produced 10,956 12,952 Workings Quarter 3 Quarter 4 14,700 19,100 4,584 19,284 3,528 15,756 Six Months 22,900 3,528 26,428 2,520 23,908 (24% of the next quarter's expected unit sales) (24% of the current quarter's expected unit sales)