**Sales Forecast and Production Planning for Down Under Products, Limited**Down Under Products, Limited of Australia has forecasted its sales of popular boomerangs for the next four months as follows:- **April:** 50,000 units- **May:** 75,000 units- **June:** 90,000 units- **July:** 80,000 unitsThe company is in the process of preparing a production budget for the second quarter. Historical data suggests that the end-of-month inventory must equal 10% of the subsequent month’s unit sales. As of the end of March, the inventory was 5,000 units.**Objective:**Create a production budget for each month and in total for the second quarter.---**Production Budget Table:**| | April | May | June | Quarter Total ||------------------------------|-------|-----|------|---------------|| **Budgeted unit sales** | | | | || **Add: Desired ending inventory** | | | | 10% of next month’s sales || **Total needs** | 0 | 0 | 0 | 0 || **Less: Beginning inventory**| | | | || **Required production in units** | 0 | 0 | 0 | 0 |This table is utilized to compute the required production for each month, considering both sales and inventory policies.

Ending inventory units = Month sales x 10 %

Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the next four months as follows: Unit Sales April May June 50,000 75,000 90,000 80,000 July 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, Limited Production Budget

Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the next four months as follows: Unit Sales April May June 50,000 75,000 90,000 80,000 July 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, Limited Production Budget

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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