Exercise $9-20.$ Production Budget

OBJECTIVE $2$

CPA $3\mathrm{.}2\mathrm{.}1$; $3\mathrm{.}2\mathrm{.}2$

De Silva Inc. produces submersible water pumps for ponds and cisterns. The unit sales for the first four months of the year for this product are as follows:

$\backslash$table$[[,$Unit Sales$],[$January$,180,000],[$February$,],[$March$,220,000],[$April$,200,000]]$

Company policy requires that ending inventories for each month be $25$ percent of next month's sales. However, at the beginning of January, due to greater sales in December than anticipated, the beginning inventory of pumps is only $21,000.$

Required:

Prepare a production budget for the first quarter of the year. Show the number of units that should be produced each month as well as for the quarter in total.