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Homework answers / question archive / Drones Ltd

Drones Ltd

Accounting

Drones

Ltd. produces and sells “

Skyview

”. The following information

is an extract from the

sales forecast report :

The fore

casted sales for the months of

Apr

to

May

202

1

are as follows :

-

Apr : 55,000 units

May : 58,000 units

The management of

Drones

has proposed to set a target ending finished goods for each

month at

30

% of the following month’s sales.

Drones

estimates

that sales will increase by

3,000 units

(from the number of units sold in

May

) for the month of Ju

ne

.

Required :

(a)

Compute the following (show workings using a production budget or other means) :

(i)

Budgeted production (units) for the month of

Apr

202

1

.

(3 ma

rks)

(ii)

Target ending finished goods (units) for

May

202

1

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