EXERCISE 2 Production Budget
Crystal Telecom has budgeted the sales of its innovative mobile phone over the next four months as follows:
The company is now in the process of preparing a production budget for the third quarter. Past experience has shown that end-of-month finished goods inventories must equal 10% of the next month”s sales. The inventory at the end of June was 3,000 units.
| Sales in Units | |
| July | 30,000 |
| August | 45,000 |
| September | 60,000 |
| October | 50,000 |
Required:
Prepare a production budget for the third quarter showing the number of units to be produced each month and for the quarter in total.
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