Exercise $8-2($Algo$)$ Production Budget $[$LO$8-3]$

Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the next four months as follows:

$\backslash$begin$\{$tabular$\}\{$lr$\}$

& $\backslash$multicolumn$\{1\}\{$c$\}\{$ Unit $\}\backslash \backslash$

& $\backslash$multicolumn$\{1\}\{$c$\}\{$ Sales $\}\backslash \backslash$

$\backslash$hline April & $84,000\backslash \backslash$

May & $90,000\backslash \backslash$

June & $124,000\backslash \backslash$

July & $97,000$

$\backslash$end$\{$tabular$\}$

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 $20\backslash \%$ of the following month's unit sales. The inventory at the end of March was $16,800$ units.

Required:

Prepare a production budget by month and in total, for the second quarter.

$\backslash$begin$\{$tabular$\}\{|$l$|$r$|$r$|$r$|$r$|\}$

$\backslash$hline $\backslash$multicolumn$\{4\}\{|$c$|\}\{$ Down Under Products, Limited $\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{2\}\{|$c$|\}\{$ Production Budget $\}\backslash \backslash$

$\backslash$hline & $\backslash$multicolumn$\{1\}\{|$c$|\}\{$ April $\}$ & $\backslash$multicolumn$\{1\}\{$c$|\}\{$ May $\}$ & June & Quarter $\backslash \backslash$

$\backslash$hline Budgeted unit sales & $84,000$ & $90,000$ & $124,000$ & $\backslash \backslash$

$\backslash$hline $\backslash$begin$\{$tabular$\}\{$l$\}$

Add: Desired units of ending finished goods $\backslash \backslash$

inventory

$\backslash$end$\{$tabular$\}$ & & & & $\backslash \backslash$

$\backslash$hline Total needs & $84,000$ & $90,000$ & $124,000$ & $\backslash \backslash$

$\backslash$hline Less: Units of beginning finished goods inventory & & & & $\backslash \backslash$

$\backslash$hline Required production in units & $84,000$ & $90,000$ & $124,000$ & $0\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$