Question

Ruiz co. provides the following sales forecast for the next four mounths. The company wants to end each month with ending finished goods inventory equal to 40% of next months forecasted sales. Finished goods inventory on april 1 is 224 units. Prepare a production budget for the months of april may june

Answer 1

Some information is missing, estimated sales:

• April = 660
• May = 740
• June = 690
• July = 780

Ruiz Co.

Production Budget

For the Months of April, May and June

April May June

Forecasted sales 660 740 690

Planned ending inventory 296 276 312

Total production required 956 1,016 1,002

- Beginning inventory -224 -296 -276

Units to be produced 732 720 726