4 Blue Wave Co. predicts the following unit sales for the coming four months: September,...
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4 Blue Wave Co. predicts the following unit sales for the coming four months: September, 3,600 units; October, 4,600 units; November, 6,500 units; and December, 8,300 units. The company's policy is to maintain finished goods inventory equal to 70% of the next month's sales. At the end of August, the company had 2,600 finished units on hand. 0.33 points Prepare a production budget for each of the months of September, October, and November. Answer is complete but not entirely correct. Blue Wave Co. November 8,300 % 70 % Production Budget September, October and November September October Next month's budgeted sales 4,600 6,500 (units) Ratio of inventory to future sales 70 % 70 Budgeted ending inventory (units) 3,600 X 4,600 X Add: Budgeted sales (units) 3,220 X 9,150 X Required units to be produced 6,820 13,750 Less: Beginning inventory (units) 2,600 3,220 Units to be produced 4,220 10,530 6,500 X 12,310 X 18,810 4,550 14,260
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