Required: Prepare a production schedule that will have level production each month while showing the expected inventories at the end of each month.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Production and Inventories. Salvador Company has irregular sales
volume during the year, and management is planning to produce at a
uniform rate with inventories increasing or decreasing throughout the
year. A sales budget in product units is forecasted for the first six
months of 20xx as follows:
January
40,000 units
February
25,000 units
March
45,000 units
April
May
20,000 units
40,000 units
June
30,000 units
The production cycle is short and work in process inventories are
insignificant. An inventory of 10,000 units was on hand at January 1,
and 20,000 units of inventory are planned for June 30.
Required: Prepare a production schedule that will have level production
each month while showing the expected inventories at the end of each
month.
Transcribed Image Text:Production and Inventories. Salvador Company has irregular sales volume during the year, and management is planning to produce at a uniform rate with inventories increasing or decreasing throughout the year. A sales budget in product units is forecasted for the first six months of 20xx as follows: January 40,000 units February 25,000 units March 45,000 units April May 20,000 units 40,000 units June 30,000 units The production cycle is short and work in process inventories are insignificant. An inventory of 10,000 units was on hand at January 1, and 20,000 units of inventory are planned for June 30. Required: Prepare a production schedule that will have level production each month while showing the expected inventories at the end of each month.
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