Question

Company expects to sell units of finished product in and units in . The company has units on hand on 1 and desires to have an ending inventory equal to ​% of the next​ month's sales. sales are expected to be units. Prepare ​'s production budget for and .

Answer 1

Complete Question:

Yasmin Company expects to sell 1,900 units of finished product in January and 2,250 units in February. The company has 270 units on hand on 1st January and desires to have an ending inventory equal to 20% of the next​ month's sales. March sales are expected to be 2,350 units. Prepare Yasmin's production budget for January and February.

Answer:

680 Units for January and 250 units for February.

Explanation:

Production Budget can be calculated using the following formula:

Production Budget   =     Expected Sales + Desired Ending Inventory Units - Opening Inventory

The formula is reflected in a tabular form below:

Production Budget For Yasmin Incorporation

                                                                January          February

Expected Future Sales (Unit)                     900                 250

Add: Desired Ending Inventory Units         50                   70  

Less: Openning Inventory Units                270                 70      

Production Units                                         680                 250