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Rock Telecom has budgeted the sales of its innovative mobile phone over the next four months as follows:
Sales in Units
July..................................... 30,000
August .............................. 45,000
September.......................... 60,000
October.............................. 50,000
The company is now in the process of preparing a production budget for the third quarter. Past experience has shown that end-of-month inventories of finished goods must equal 10% of the next month's sales. The inventory at the end of June was 3,000 units.
Required:
Problem 1: Prepare a production budget for the third quarter showing the number of units to be produced each month and for the quarter in total.
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