Question

Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:

Answer 1

Answer:

Results are below.

Explanation:

Giving the following information:

Sales in Units

April 54,000

May 75,000

June 94,000

July 82,000

Desired ending inventory= 20% of the following month’s sales.

The inventory at the end of March was 10,800 units.

To calculate the production for each month, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

April:

Sales= 54,000

Ending inventory= 75,000*0.2= 15,000

Beginning inventory= (10,800)

Total= 58,200 units

May:

Sales= 75,000

Ending inventory= 94,000*0.2= 18,800

Beginning inventory= (15,000)

Total= 78,800 units

June:

Sales= 94,000

Ending inventory= 82,000*0.2= 16,400

Beginning inventory= (18,800)

Total= 91,600 units

Total for the quarter= 228,600 units