The Happy Times, Limited, company of Arizona has budgeted sales of its most popular alphabet game for children ages 4 through 8 years. The budget is for the next four months, beginning in April.
Sales in Units
April.......................50,000
May.......................75,000
June.......................90,000
July.......................80,000
The company now is in the process of preparing a production budget for the second quarter. Experience has shown the company that the end-of-month inventory levels should equal 10% of the following month's sales. The inventory at the end of March was 5,000 units.