Problem
Production Budget
Aqua-pro Inc. produces submersible water pumps for ponds and cisterns. The unit sales for selected months of the year are as follows:
Unit Sales
April 216,000
May 264,000
June 240,000
July 288,000
Company policy requires that ending inventories for each month be 25% of next month's sales. However, at the beginning of April, due to greater sales in March than anticipated, the beginning inventory of water pumps is only 21,000.
Required:
Prepare a production budget for the second quarter of the year. Show the number of units that should be produced each month as well as for the quarter in total.