Cornerstone 4.

2 Production Budget

Refer to: FlashKick Company

Required:

1. Production budget for practice balls:

January February March

Unit sales 50,000 58,000 80,000

Desired ending inventory 11,600 16,000 20,000
Total needed 61,600 74,000 100,000
Less: Beginning inventory 3,100 11,600 16,000
Units produced 58,500 62,400 84,000

Production budget for match balls:

January February March

Unit sales 7,000 7,500 13,000

Desired ending inventory 1,500 2,600 3,600
Total needed 8,500 10,100 16,600
Less: Beginning inventory 400 1,500 2,600
Units produced 8,100 8,600 14,000

2. To construct a production budget for April, I need to have the sales in May. This is
due to the calculation of desired ending inventory, which is 20% of the sales for the next
period.