Solution-Prepare a production budget for the upcoming year

Prepare a production budget for the upcoming year

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Reference no: EM133073822

Question - The following information relates to a company that produces a single product. Each unit requires three pounds of material. Inventory requirements are as follows:

a. The finished goods inventory on hand at the end of each month must be equal to 8,000 units plus 28% of the next month's sales. The finished goods inventory on December 31 is budgeted based on this requirement.

b. The raw materials inventory on hand at the end of each month must be equal to one- half of the following month's production needs for raw materials. The raw materials inventory on December 31 is budgeted based on this requirement.

c. The company maintains no work in process inventories.

A sales budget for the company for the first and second quarters of the upcoming year follows.

	Budgeted Sales in Units
January	39,000
February	49,000
March	69,000
April	34,000
May	19,000
June	9,000

Required - Prepare a production budget for the upcoming year for the months of January, February, March and April.

Reference no: EM133073822

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Prepare a production budget for the upcoming year

Reference no: EM133073822

Reference no: EM133073822

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