Chapter 9, Problem 9.5SE

Production budget (Learning Objective 2)

Nichols Cycles manufactures chainless bicycles. On March 31, Nichols Cycles had 100 bikes in inventory. The company has a policy that the ending inventory in any month must be 10% of the following month’s expected sales. Nichols Cycles expects to sell the following number of bikes in each of the next four months:

April	1,000 bikes
May	1,170 bikes
June	1,360 bikes
July	1,250 bikes

Prepare a production budget for the second quarter, with a column for each month and for the quarter.