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7 September, 11:37

Shocker corporation's sales budget shows quarterly sales for the next year as follows: unit sales quarter 1 10,000 units quarter 2 8,000 units quarter 3 12,000 units quarter 4 14,000 units corporation policy is to have a finished goods inventory at the end of each quarter equal to 20% of the next quarter's sales. budgeted production for the second quarter of the next year would be:

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  1. 7 September, 11:54
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    Budgeted production for Q2 would be 8,800 units.

    Explanation:

    For Q2, sales for the quarter is 8,000 units.

    The ending inventory is 20% of Q3.

    Since sales for Q3 is 12000units,

    20% * 12,000 = 2,400 units

    Total requirement is therefore 8000 units + 2,400 units = 10,400 units

    The beginning inventory is 20% of Q2

    Since sales for Q2 is 8,000 units,

    20% * 8000 = (1,600) units

    Budgeted Production for Q2 is therefore 8,800 units. I. e 10,400 units - 1,600 units
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