Question

Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows: April May June July Unit Sales 50,000 75,000 90,000 80,000 The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of- month inventory levels must equal 10% of the following month's unit sales. The inventory at the end of March was 5,000 units. Required: Prepare a production budget by month and in total, for the second quarter. Down Under Products, Ltd., Production Budget April May June Quarter Budgeted units sales Total needs Required production in units

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer Down Under Products Ltd. Production Budget April May June Quarter 5 Budgeted Unit Sales Desired ending inventory 75000 50000 90000 215000 7500 8000 9000 8000 (75000 10%) (90000 10%) (80000 10%) 9Total needs 0 Beginning inventory 1 Required for production in units 2 3 Note 57500 84000 98000 223000 5000 7500 9000 5000 218000 52500 76500 89000 4 The unbold amount are not part of final answer and are just for understanding only. 5 6 Thank You