Question

Bubble systems manufactures rugged handheld bubble blowers for use in a adverse working environments. Bubble Systems tries to maintain inventory at 40% of the following month’s expected unit sales. Prepared by the sales manager. Bubble systems began the year with 8,000 units in stock, based on the following unit sales projections prepared by the sales manager:

||Month||Amount

|January|20,000

|February|25,000

|March|18,000

|April|22,000

Prepare a schedule of planned unit production of handheld bubble blowers for January through March.

Please do not copy from chegg otherwise i have to report the answer. Explain the answer throughly with showing each step of the calculation.

Answer 1

Production budget is a schedule showing planned production in units which must be made by a manufacturer during a specific period to meet the expected demand for sales and the planned finished goods inventory. The required production is determined by subtracting the beginning finished goods inventory from the sum of expected sales and planned ending inventory of the period. Thus:

Planned Produciton in Units
= Expected Sales in Units
+ Planned Ending Inventory in Units
− Begining Inventory in Units

Schedule of planned unit production of handheld bubble blowers for January through March

Particulars	January	February	March
Budgeted Sales in units	20000	25000	18000
Add: planned ending units (40% of next month's expected sales)	10000 (25000*40%)	7200 (18000*40%)	8800 (22000*40%)
Less: Beginning inventory units	(8000)	(10000)	(7200)
Planned production units	22000 units	22200 units	19600 units

Note- Ending units of one month are beginning units of next month.