Question: Preparing a Production Budget Patrick Inc. makes industrial solvents. In the first four months of the coming year, Patrick expects the following unit sales:
January 41,000
February 38,000
March 50,000
April 51,000
Patrick's policy is to have 25 percent of next month's sales in ending inventory. On January 1, it is expected that there will be 6,700 drums of solvent on hand.
Required: Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total.