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In: Accounting

unit sales will be 10,000 in quarter 1; 12,000 in quarter 2; 14,000 in quarter 3;...

unit sales will be 10,000 in quarter 1; 12,000 in quarter 2; 14,000 in quarter 3; and 18,000 in quarter 4. Management desires to have an ending finished goods inventory equal to 10% of the next quarter's expected unit sales. What is budgeted production in units for quarter 2?

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Budgeted Production in units for second Quarter                    12,200 units
Workings:
Second Quarter
Sales in units                    12,000
Add: Ending finished goods inventory (Sales of Next Quarter X 10%) (14000 X 10%)                      1,400
Less: Beginning finished goods (ending units of previous Quarter) (12000 X 10%)                      1,200
Budgeted Production in units                    12,200

ekkarill92 answered 2 years ago
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