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Homework answers / question archive / Yem Company expects to sell 1,600 units of finished product in January and 1,950 units in February
Yem Company expects to sell 1,600 units of finished product in January and 1,950 units in February. The company has 170 units on hand on January 1 and desires to have an ending inventory equal to 80% of the next month's sales. March sales are expected to be 2,100 units. Prepare Yem's production budget for January and February. Select the labels, enter the amounts and prepare the production budget for January. Then, prepare the production budget for February. Yem Company Production Budget Two Months Ended January 31 and February, 28 January February Plus: Total units needed Less: Budgeted units to be produced
| Particulars | January | February | |
| A | Sales units (forecasted) | 1600 | 1950 |
| B | Plus:Planned Ending units of Inventory | 1560 | 1680 |
| C | Total production required(units needed)(A+B) | 3160 | 3630 |
| D | Less:Beginning Inventory of Finished Goods | 170 | 1560 |
| Units to be Produced(C-D) | 2990 | 2070 |
Ending inventory of Jan=80% of feb sales=80%*1950=1560
Ending inventory of Feb=80% of March sales=80%*2100=1680
Beginning inventory of Feb is equals to Ending inventory of Jan i.e 1560
