Question

The Tough Jeans Company produces two different styles of jeans, Working Life and Social Life. The company sales budget estimates that 400,000 of the Working Life jeans and 250,000 of the Social Life jeans will be sold during the year. The company begins with 9,000 pairs of Working Life and 18,000 pairs of Social Life. The company desires ending inventory of 7,500 of Working Life and 10,000 Social Life. Prepare a production budget for the year. Tough Jeans Company Production Budget For the Year Ending December 31

Answer 1

Tough Jeans Company

Production Budget For the Year Ending December 31

Working Life Social Life

Budgeted Sales 400,000 250,000

Add Budgeted Closing Inventory 7,500 10,000

Total 407,500 260,000

Less Budgeted Opening Inventory (9,000) (18,000)

Budgeted Production 398,500 242,000

Step-by-step explanation:

A Production Budget is prepared to determine amount of units required to meet the Sales and Inventory targets during the year.