Blue Wave Company budgets the following unit sales for the next four months: September, 3,800 units; October, 4,200 units; November, 6,500 units; and December, 8,400 units. The company's policy is to maintain finished goods inventory equal to 70% of the next month's unit sales. At the end of August, the company had 2,660 finished units in inventory. Prepare a production budget for each of the months of September, October, and November. BLUE WAVE COMPANY Production Budget 人 September October November Budgeted sales units Add: Desired ending inventory 3,800 4,200 6,500 Next period budgeted sales units 4,200 6,500 8,400 Ratio of inventory to future sales 70% 70% 70% t Desired ending inventory units Total required units 0 Less: Beginning inventory units 2,660 2,660 2,660 nces Units to produce

Blue Wave Company budgets the following unit sales for the next four months: September, 3,800 units; October, 4,200 units; November, 6,500 units; and December, 8,400 units. The company's policy is to maintain finished goods inventory equal to 70% of the next month's unit sales. At the end of August, the company had 2,660 finished units in inventory. Prepare a production budget for each of the months of September, October, and November. BLUE WAVE COMPANY Production Budget 人 September October November Budgeted sales units Add: Desired ending inventory 3,800 4,200 6,500 Next period budgeted sales units 4,200 6,500 8,400 Ratio of inventory to future sales 70% 70% 70% t Desired ending inventory units Total required units 0 Less: Beginning inventory units 2,660 2,660 2,660 nces Units to produce

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 15E: Palmgren Company produces consumer products. The sales budget for four months of the year is...

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The sales department of Macro Manufacturing Co. has forecast sales for its single product to be 20,000 units for June, with three-quarters of the sales expected in the East region and one-fourth in the West region. The budgeted selling price is 25 per unit. The desired ending inventory on June 30 is 2,000 units, and the expected beginning inventory on June 1 is 3,000 units. Prepare the following: a. A sales budget for June. b. A production budget for June.
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