Question

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 Working Life Social Life Expected units to be sold (as per sales budget) Total units available Total units to be produced

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 Stock 7,500 10,000

Total Production Needed 407,500 260,000

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

Budgeted Production 389,500 (242,000)

Step-by-step explanation:

The budget should show the quantities of finished goods that must be produced to meet the expected sales plus and inventory levels that might be required.