A company prepares its monthly production budget using the following policy: 70% of the current month's sales are to be produced in the same…
CA Intermediate · Cost and Management Accounting · MTP · September 2025
A company prepares its monthly production budget using the following policy: 70% of the current month's sales are to be produced in the same month.The company maintains an opening finished goods inventory of 6,000 units for June.The desired closing inventory for June is 30% of July's forecasted sales. The sales forecasts are as follows: Month Sales Forecast (Units) May 20,000 June 24,000 July 30,000 August 18,000 What is the production budget for June?
Suggested Answer and Working Notes:
Correct Answer: Option (D)
19,800
Topics: Budgets and Budgetary Control
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