FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Blue Wave Company budgets the following unit sales for the next four months: September, 3,000 units; October, 4,900 units:
November, 6,900 units; and December, 8,400 units. The company's policy is to maintain finished goods Inventory equal to 60% of the
next month's unit sales. At the end of August, the company had 1,800 finished units in inventory.
Prepare a production budget for each of the months of September, October, and November.
Budgeted sales units
Add Desired onding inventory
BLUE WAVE COMPANY
Production Budget
September
3,000
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
4,900
60%
October
4,000
6,900
60%
November
6,900
2,760
60 %
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Transcribed Image Text:Blue Wave Company budgets the following unit sales for the next four months: September, 3,000 units; October, 4,900 units: November, 6,900 units; and December, 8,400 units. The company's policy is to maintain finished goods Inventory equal to 60% of the next month's unit sales. At the end of August, the company had 1,800 finished units in inventory. Prepare a production budget for each of the months of September, October, and November. Budgeted sales units Add Desired onding inventory BLUE WAVE COMPANY Production Budget September 3,000 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 4,900 60% October 4,000 6,900 60% November 6,900 2,760 60 %
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