Question

Mount Company has budgeted the following unit sales: 2019 Units January 8,000 February 10,000 March 9,000 The finished goods units on hand on December 31, 2018, was 1,000 units. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 10% of next month's anticipated sales. Instructions: Prepare a production budget for February of 2019.

Answer 1

Production budget for February - Mount Company

Particulars Amount

Budgeted sales units 10,000

Add: Desired ending inventory 900

(10% of following month sale)

Total needs 10,900

Less: Beginning inventory 1,000

Budgeted Production units 9,900