Problem
Windsor Lock Company's controller is preparing a production budget for the year. The company's policy is to maintain a finished goods inventory equal to one-half of the following month's sales. Sales of 5,000 locks are budgeted for April. Complete the monthly production budget for the first quarter:
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January
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February
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March
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Sales in units
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5,000
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4,000
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6,000
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Add desired units of ending finished goods inventory
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2,000
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Desired total units
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7,000
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Less desired units of beginning finished goods inventory
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Total production units
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4,500
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