Exercise 8-2 (Algo) Production Budget [LOB-3] Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the next four months as follows: April May June July Unit Sales 58,000 75,000 98,000 84,000 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 15% of the following month's unit sales. The inventory at the end of March was 8,700 units. Required: Prepare a production budget by month and in total, for the second quarter. Budgeted unit sales Add: Desired units of ending finished goods inventory Total needs Less: Units of beginning finished goods inventory Required production in units Down Under Products, Limited Production Budget April May June Quarter H 0 0 0 0 0
Exercise 8-2 (Algo) Production Budget [LOB-3] Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the next four months as follows: April May June July Unit Sales 58,000 75,000 98,000 84,000 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 15% of the following month's unit sales. The inventory at the end of March was 8,700 units. Required: Prepare a production budget by month and in total, for the second quarter. Budgeted unit sales Add: Desired units of ending finished goods inventory Total needs Less: Units of beginning finished goods inventory Required production in units Down Under Products, Limited Production Budget April May June Quarter H 0 0 0 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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![Exercise 8-2 (Algo) Production Budget [LO8-3]
Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the next four months as follows:
April
May
June
July
Unit Sales
58,000
75,000
98,000
84,000
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 15% of the following month's unit sales. The inventory at the end of March was 8,700 units.
Required:
Prepare a production budget by month and in total, for the second quarter.
Budgeted unit sales
Add: Desired units of ending finished goods inventory
Total needs
Less: Units of beginning finished goods inventory
Required production in units
Down Under Products, Limited
Production Budget
April
May
June
Quarter
H
0
0
0
0
0
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F650582c6-bbfa-481e-83cd-d0e98ab2088a%2F806a41ed-0587-4665-9364-c1e572d34d21%2Fxmibjtk_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 8-2 (Algo) Production Budget [LO8-3]
Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the next four months as follows:
April
May
June
July
Unit Sales
58,000
75,000
98,000
84,000
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 15% of the following month's unit sales. The inventory at the end of March was 8,700 units.
Required:
Prepare a production budget by month and in total, for the second quarter.
Budgeted unit sales
Add: Desired units of ending finished goods inventory
Total needs
Less: Units of beginning finished goods inventory
Required production in units
Down Under Products, Limited
Production Budget
April
May
June
Quarter
H
0
0
0
0
0
0
0
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