Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
April . . . . . . . . . . . . . . . . 50,000
May . . . . . . . . . . . . . . . . 75,000
June . . . . . . . . . . . . . . . 90,000
July . . . . . . . . . . . . . . . . 80,000
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 10% of the following month’s unit sales. The inventory at the end of March was 5,000 units.
Using Schedule 2 as your guide, prepare a production budget by month and in total, for the second quarter.
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