Ruiz Company provides the following budgeted sales for the next four months. The company wants to end each month with ending finished goods inventory equal to 25% of next month's budgeted unit sales. Finished goods inventory on April 1 is 125 units. Prepare a production budget for the months of April, May, and June. July April see May 580 June 540 620 Budgeted sales units & Answer is complete but not entirely correct. RUIZ COMPANY May June 540 X 620 Production Budget April Budgeted sales units 580 Add: Desired ending inventory Next period budgeted sales units 580 Ratio of inventory to future sales 25% 500 Desired ending inventory units 540 620 25 % 25% 25% 580 540 Answer is complete but not entirely correct. RUIZ COMPANY Production Budget April May June 580 % 540 620 X 580 540 620 25% 25% 25% Budgeted sales units Add: Desired ending inventory Next period budgeted sales units Ratio of inventory to future sales Desired ending inventory units Total required units Less: Beginning inventory units Units to produce 500 580 540 645 715 895 125 145 135 520 570 500
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