Question

ruiz company provides the following budgeted sales for the next four months. the company wants to end each month with ending finished goods inventory equal to 30% of next months budgeted unit sales. finished goods inventory on april 1 is 210 units. prepare a production budget for the months of april, may, and june budgeted sales units april, may, and june

Answer 1

The budgeted sales units for April, May, and June will be 546, 600, and 578 respectively.

How to calculate the units to be produced?

The unit to be produced in April will be:

= (610 × 22%) + 530 - 106

= 122 + 530 - 106

= 546

The unit to be produced in May will be:

= (560 × 20%) + 610 - 122

= 112 + 610 - 123

= 600

The unit to be produced in June will be:

= (650 × 20%) + 560 - 113

= 130 + 560 + 113

= 578

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