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

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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
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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