FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Step 1: Concept
Production budget is prepared to Calculate total production required during the year.
Budgeted production : Closing stock + Budgted sales - Opening stock
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- Majan company has budgeted sales in units for the next five months as follows: June 5,400 units July 6,500 units August 7,000 units September 8,200 units October 4,800 units Past experience has shown that the ending inventory for each month should be equal to 10% of the next month's sales in units. The inventory on May 31 is 400 units. The company needs to prepare a Production Budget for the next five months. The total number of units to be produced in August is a. 7,120 units b. 7,420 units c. 7,170 units d. 8,520 units W Parrow_forwardAggrava Limited is currently preparing budgets for September to December. Its estimated sales figures in units are as follows: (financial information) = September October November December Sales (units) 5,569 14,234 14,847 15,121 Inventories at 31 August totalled 16,234 units, and inventories are to be kept at a constant level for all months except December, when opening inventories on 1 December are to be increased to 23,118. Inventories will revert to the normal level on 31 December. Inventories will cost £2 per unit throughout the period, and suppliers allow Aggrava Ltd to pay in the month following an order. Other relevant information is that 3,497 units were bought in August. Requirement 1: Prepare Aggrava Ltd's inventories budget (in units) for September to December. Requirement 2: Prepare the information relevant to inventories purchases that would appear in the cash budget for the period. Question content area bottom Part…arrow_forwardDown Under Products, Limited, of Australia has budgeted sales of its popular boomerang for the next four months as follows: Unit Sales April 74,000 May 85,000 June 114,000 July 92,000 The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 10% of the following month’s unit sales. The inventory at the end of March was 7,400 units. Required: Prepare a production budget by month and in total, for the second quarter.arrow_forward
- FRANCORP is preparing budgets for the quarter ending March 31. Budgeted sales for the next 5 months are as follows: January February March 16250 units 16950 units 17200 units 18350 units 17900 units April May The selling price per unit is $15. Determine the total budgeted sales for the entire quarter ending March 31st. O $756,000 O $815,000 O $850,350 O $750,550arrow_forwardBlue Wave Co. predicts the following unit sales for the coming four months: September, 3,300 units; October, 4,900 units; November, 6,700 units; and December, 7,900 units. The company's policy is to maintain finished goods inventory equal to 50% of the next month's sales. At the end of August, the company had 2,800 finished units on hand. Prepare a production budget for each of the months of September, October, and November. Blue Wave Co. Production Budget September, October and November September Next month's budgeted sales (units) Units to be produced % October % November %arrow_forwardABC Company’s budgeted sales for June, July, and August are 12,800, 16,800, and 14,800 units, respectively. ABC requires 30% of the next month’s budgeted unit sales as finished goods inventory each month. Budgeted ending finished goods inventory for May is 3,840 units. Required: Calculate the number of units to be produced in June and July.arrow_forward
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