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.

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Answer:

    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