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Palermo Company estimates that unit sales will be 10,500 in quarter 1; 12,500 in quarter 2; 14,600 in
quarter 3; and 18,900 in quarter 4. Management desires to have an ending finished goods inventory
equal to 22% of the next quarter’s expected unit sales.
Prepare a production budget by quarters for the first 6 months of 2014.
PALERMO COMPANY
Production Budget
For the Six Months Ending June 30, 2014
Quarter
1
Expected Unit Sales
Add
10500
14600
:
Desired Ending Finished Goods Inventory
Total Required Units
Less
2
2310
121810
:
Beginning Finished Goods Inventory
Required Production Units
3212
9598
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