Exercise 10-6

Paver produces a vitamin-enhanced dog food that is sold in Kansas. The company expects sales to be 12,800 bags in January, 14,500 bags in February, 19,700 bags in March, and 21,900 bags in April. There are 1,400 bags on hand at the start of January. Paver desires to maintain monthly ending inventory equal to 15 percent of next month’s expected sales.

The production budget for Paver for the months of January, February, and March is as follows:

PaverProduction BudgetFor the months of January, February, and MarchJanuaryFebruaryMarchQuarter