Friden Company has budgeted sales and production over the next quarter as follows:
$\begin{array}{|l|rr|r|}
\hline& \text { Apri } & \text { May } & \text { June } \
\hline \text { Sales in Units } & 100,000 & 120,000 & ? \
\hline \text { Production in Units } & 104,000 & 128,000 & 156,000 \
\hline
\end{array}$
On April 1,the company has 20,000 units of product on hand.A minimum of 20% of the next month's sales needs (in units)must be on hand at the end of each month.July sales are expected to be 140,000 units.What would be the budgeted sales for June (in units)?

Question

Friden Company has budgeted sales and production over the next quarter as follows:
$\begin{array}{|l|rr|r|} 
\hline& \text { Apri } & \text { May } & \text { June } \
\hline \text { Sales in Units } & 100,000 & 120,000 & ? \
\hline \text { Production in Units } & 104,000 & 128,000 & 156,000 \
\hline
\end{array}$
On April 1,the company has 20,000 units of product on hand.A minimum of 20% of the next month's sales needs (in units)must be on hand at the end of each month.July sales are expected to be 140,000 units.What would be the budgeted sales for June (in units)?

Quizplus · Accepted Answer

To find the budgeted sales for June, we need to work backwards from the production and inventory requirements. - April 1 inventory: 20,000 units- April sales: 100,000 units- April production: 104,000 unitsEnd of April inventory (which is the beginning of May inventory) = Beginning inventory + Production - Sales = 20,000 + 104,000 - 100,000 = 24,000 units- May sales: 120,000 units- May production: 128,000 unitsEnd of May inventory = Beginning inventory + Production - Sales = 24,000 + 128,000 - 120,000 = 32,000 unitsFor June, the company needs to have 20% of July's sales (140,000 units) on hand at the end of June, which is 28,000 units.- June production: 156,000 unitsTo find June's sales, we rearrange the inventory formula to solve for sales: Beginning inventory + Production - Ending inventory = SalesBeginning inventory for June = End of May inventory = 32,000 unitsEnding inventory for June = 28,000 units (20% of July's sales)Plugging into the formula: 32,000 + 156,000 - 28,000 = SalesSales for June = 160,000 units

Friden Company Has Budgeted Sales and Production Over the Next