Answer:
PRODUCTION BUDGET
JANUARY FEBRUARY MARCH
Sales 13,400 14,300 13,100
Add: Closing stock 2,145 1,965 2,255
15,545 16,265 15,355
Less: Opening stock 1,340 2,145 1,965
Production budget 14,205 14,120 13,390
Calculation of closing stock:
January 15% x 14,300 bags = 2,145 bags
February 15% x 13,100 bags = 1,965 bags
March 15% x 15,700 bags = 2,355 bags
Explanation:
Production budget = Sales + Closing stock - Opening stock
The closing stock for January is the opening stock for February and the closing stock for February is the opening stock for march.
Closing stock is 15% of next month sales. For instance, the closing stock for January is 15% of February sales, the closing stock for February is 15% of March sales and the closing stock for March is 15% of April sales.
