Atlantic Surf manufactures surfboards. The company's budgeted sales units for the next three months is shown below. Comp s to maintain finished goods inventory equal (in units) to 40% of the next month's unit sales. As of June 30, the company has inished surfboards in inventory. Budgeted sales units July 4,500 August 7,400 September 3,800 Prepare the production budget for the months of July and August. ATLANTIC SURF Production Budget Budgeted sales units Add: Desired ending inventory Next period budgeted sales units Ratio of inventory to future sales Desired ending inventory units Total required units Less: Beginning inventory units Units to be produced July 4,500 7,400 40% 2,960 7,460 August 7,400 3,800 40% 1,520 8,920
Atlantic Surf manufactures surfboards. The company's budgeted sales units for the next three months is shown below. Comp s to maintain finished goods inventory equal (in units) to 40% of the next month's unit sales. As of June 30, the company has inished surfboards in inventory. Budgeted sales units July 4,500 August 7,400 September 3,800 Prepare the production budget for the months of July and August. ATLANTIC SURF Production Budget Budgeted sales units Add: Desired ending inventory Next period budgeted sales units Ratio of inventory to future sales Desired ending inventory units Total required units Less: Beginning inventory units Units to be produced July 4,500 7,400 40% 2,960 7,460 August 7,400 3,800 40% 1,520 8,920
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
N2.
Transcribed Image Text:Atlantic Surf manufactures surfboards. The company's budgeted sales units for the next three months is shown below. Company policy
is to maintain finished goods inventory equal (in units) to 40% of the next month's unit sales. As of June 30, the company has 1,800
finished surfboards in inventory.
July
August
4,500 7,400
Budgeted sales units
September
3,800
Prepare the production budget for the months of July and August.
ATLANTIC SURF
Production Budget
Budgeted sales units
Add: Desired ending inventory
Next period budgeted sales units
Ratio of inventory to future sales
Desired ending inventory units
Total required units
Less: Beginning inventory units
Units to be produced
July
4,500
7,400
40%
2,960
7,460
August
7,400
3,800
40%
1,520
8,920
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