High Flyers manufactures competition stunt kites. In November, Jerry Box prepared the following production budget for the first quarter of the coming year. Desired ending inventory is based on the following month’s budgeted sales.

Following higher-than-expected sales in December, Jerry conducted an inventory count on January 2 and discovered that the company had only 2,000 completed kites on hand. He decided that given the brisk sales in December, the company should increase its desired ending inventory level from 20 to 25 percent of the next month's sales volume.


a. Prepare a new production budget for the first quarter.
b. What other components of the master budget will be affected by thischange?

  • CreatedFebruary 21, 2014
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