Question

Moriarity Company has budgeted the following unit sales: 1st Quarter 2019 7,000 2nd Quarter 2019 3,000 3rd Quarter 2019 4,000 Beginning finished goods for the first quarter was 1,400 units. The company's policy is to maintain an inventory of finished goods as 20% of the next quarter sales. The production budget for the SECOND quarter is __________. (no dollar signs, decimals or commas) HINT: you must calculate the first quarter in order to calculate the 2nd quarter.

Answer 1

	Q1	Q2	Q3
Sales unit	7,000	3,000	4,000
Ending inventory of finished goods	3,000 x 20% = 600	4,000 x 20% = 800
Total finished goods inventory needed	7,600	3,800
Beginning inventory of finished goods		-600
Production Units		3,200

Moriarity Company has budgeted the following unit sales: 1st Quarter 2019 7,000 2nd Quarter 2019 3,000 3rd Quarter 2019 4,000 Beginning finished goods for the first quarter was 1,400 units. The company's policy is to maintain an inventory of finished goods as 20% of the next quarter sales. The production budget for the SECOND quarter is 3200.

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