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Exercise 10-6 Page produces a vitamin-enhanced dog food that is sold in Kansas. The company expects sales to be 12,100 b...

Exercise 10-6

Page produces a vitamin-enhanced dog food that is sold in Kansas. The company expects sales to be 12,100 bags in January, 14,300 bags in February, 23,600 bags in March, and 26,600 bags in April. There are 1,370 bags on hand at the start of January. Page desires to maintain monthly ending inventory equal to 15 percent of next month’s expected sales.

Prepare the production budget for Page for the months of January, February, and March.

Page
Production Budget
For the months of January, February, and March

January

February

March

Quarter

Desired ending inventory of finished unitsUnit salesBeginning inventory of finished unitsTotal neededUnits to be produced

LessAdd

:

Total neededBeginning inventory of finished unitsUnits to be producedUnit salesDesired ending inventory of finished units

Beginning inventory of finished unitsUnits to be producedDesired ending inventory of finished unitsUnit salesTotal needed

AddLess

:

Units to be producedBeginning inventory of finished unitsUnit salesDesired ending inventory of finished unitsTotal needed

Total neededDesired ending inventory of finished unitsBeginning inventory of finished unitsUnits to be producedUnit sales

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Answer #1

Answer

Page

Production Budget

For the months of January, February, and March

January

February

March

Quarter

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Unit sales

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                        12,100

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                                     14,300

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                                 23,600

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                                50,000

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Add: Desired ending inventory of finished units

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                          2,145

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                                       3,540

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                                    3,990

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                                  3,990

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Total needed

                        14,245

                                     17,840

                                 27,590

                                53,990

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Less: Beginning inventory of finished units

                          1,370

                                       2,145

                                    3,540

                                  1,370

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Units to be produced

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                        12,875

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                                     15,695

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                                 24,050

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                                52,620
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