Diamond Toasters
Production Budget
You have been asked to prepare the production budget for Diamond Toasters.
To keep production and sales moving smoothly, the company has the following
inventory requirements:
1. The finished goods inventory on hand at the end of each month must be equal
to 24,000 units plus 20% of next month's sales. The finished goods inventory on
March 31 is 28,000 units.
2. The company maintains no work in process inventories.
The sales budget for Diamond Toasters over the next 4 months is:
Budgeted Sales in Units
April
32,000
May
28,000
June
34,000
July
36,000
A. Prepare a production budget for Diamond Toasters for April, May, June and July.
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