Novela, Inc. produces office supplies, including pencils. Pencils are bundled in packages; each package sells for P20. The sales budget for the first four (4) months of the year follows for this product: Rolls in units January 200,000 February 240,000 March 220,000 April 200,000 Company policy requires that ending inventories for each month to be 10% of next month's sales. However, due to greater sales in December than anticipated, the ending inventory of pencils for that month is only 10,000 packages. Required: Prepare a production budget for the first quarter of the year. Show the number of units that should be produced each month and for the quarter in total.

Novela, Inc. produces office supplies, including pencils. Pencils are bundled in packages; each package sells for P20. The sales budget for the first four (4) months of the year follows for this product: Rolls in units January 200,000 February 240,000 March 220,000 April 200,000 Company policy requires that ending inventories for each month to be 10% of next month's sales. However, due to greater sales in December than anticipated, the ending inventory of pencils for that month is only 10,000 packages. Required: Prepare a production budget for the first quarter of the year. Show the number of units that should be produced each month and for the quarter in total.

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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