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Tough Jeans Company produces two different styles of jeans: Working Life and Social Life. The company sales budget estimates that 400,000 of the Working Life jeans and 250,000 of the Social Life jeans will be sold during the year. The company begins with 9,000 pairs of Working Life and 18,000 pairs of Social Life. The company desires ending inventory of 7,500 of Working Life and 10,000 Social Life. Prepare a production budget for the year. Tough Jeans Company Production Budget For the Year Ending December 31 Working Life Social Life Expected units to be sold (as per sales budget) Total units available Total units to be produced

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Answer:

Tough Jeans Company Production Budget For the Year Ending December 31

                                                          Working Life                   Social Life

Budgeted Sales                                  400,000                         250,000

Add Budgeted Closing Stock                 7,500                            10,000

Total Production Needed                   407,500                          260,000

Less Budgeted Opening Stock            (9,000)                           (18,000)

Budgeted Production                          389,500                         (242,000)

Explanation:

The budget should show the quantities of finished goods that must be produced to meet the expected sales plus and inventory levels that might be required.

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