The production manager of Miller Enterprise plans to have an inventory on hand at the end of each month that will equal 150% of the next month\'s sales. This requirement is met at the ed of February. A sales budget for the four months ending June 30th is as follows. Prepare a production budget for April and May. Solution The production budget for Apr and May are 175000 and 155000 respectively. .

1. The production manager of Miller Enterprise plans to have an inventory on hand at the end of
each month that will equal 150% of the next month's sales. This requirement is met at the ed of
February. A sales budget for the four months ending June 30th is as follows.
Prepare a production budget for April and May.
Month Units
March 30,000
April 50,000
May 80,000
June 40,000
Solution
The production budget for Apr and May are 175000 and 155000 respectively.
Month Units Inventory Calculation Inventory
March 30,000 =30000+1.5*50000 105000
April 50,000 =105000-50000+80000*1.5 175000
May 80,000 =175000-80000+40000*1.5 155000
June 40,000