September sales in Unit?

Question

Frolic Corporation has budgeted sales and production over the next quarter as follow:

July August September

Sales in Units 50,000 62,000 ????

Production in units 71,200 62,300 66,650

The company has 6,000 units of product on hand at July 1. 10% of the next month's sales in units should be on hand at the end of each month. October sales are expected to be 81,500 units.

Required: Prepare the Budgeted sales for September in units.

Answer 1

July August September

Beginning Inventory 6,000 27,200 27,500

+ Produced 71,200 62,300 66,650

Cost of Goods Available For Sales 77,200 89,500 94,150

Less: Sales (50,000) (62,000) (86,000)

Ending Inventory 27,200 27,500 8,150

Using the information given for July we are able to find our ending inventory for July that becomes the beginning inventory for August. We then have enough information for August to find it's ending inventory that becomes the beginning inventory for September. We then use the given information of 10% of next month(October's sales) to find September's ending inventory. We then have three of the four parts needed in the budget and are able to then solve for September sales of 86,000.