Question

Denver Yards Manufacturing expects to sell the following number of trimmers each month for $150 each: July 1,750 Trimmers August 1,500 Trimmers September 750 Trimmers October 500 Trimmers On June 30, Denver Yards Manufacturing had 100 bush trimmers in inventory. The company has a policy that the ending inventory in any month must be 16% of the following month's expected sales. Required: Prepare a sales budget for July till September. Prepare a production budget for July till September, with a column for each month.

Answer 1

Sales Budget
	July	August	September
Budgeted Sales (in units)	1,750	1,500	750
Expected Selling Price	$150	$150	$150
Budgeted Sales ($)	$262,500	$225,000	$112,500
Production Budget (in units)
	July	August	September
Budgeted Sales	1,750	1,500	750
Add: Ending Inventory	240	120	80
	(1,500 * 16%)	(750 * 16%)	(500 * 16%)
Less: Beginning Inventory	100	240	120
Trimmers to be produced	1,890	1,380	710