Question

Palmgren Company produces consumer products. The sales budget for four months of the year is presented below. Unit Sales Dollar Sales July 31,000 $970,000 August 34,500 1,063,100 September 38,500 1,198,000 October 37,500 1,144,200 Company policy requires that ending inventories for each month be 25 percent of next month's sales. At the beginning of July, the beginning inventory of consumer products met that policy Required: Prepare a production budget for the third quarter of the year. Show the number of units that should be produced each month as well as for the quarter in total. Paimgren Company Production Budget For the Third Quarter July August September Total Unit sales Total needed Units produced Previous Next Check My Work 2 more Check My Work uses remaining Email Instructor Save and Ext Submit Assignment for Grading

Answer 1

Palmgren Company
Production Budget
For the third quarter
	July	August	September	Total
Unit sales	31,000	34,500	38,500	104,000
Add: Desired Ending inventory	34,500*25% = 8,625	38,500*25% = 9,625	37,500*25% = 9,375	37,500*25% = 9,375
Total needs	39,625	44,125	47,875	113,375
Less: Beginning inventory	31,000*25% = 7,750	34,500*25% = 8,625	38,500*25% = 9,625	31,000*25% = 7,750
Units produced	31,875	35,500	38,250	105,625

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