Question

Vineyard Corporation, a manufacturer of fine wines, began the year with 20,000 bottles in inventory. The company estimated the budgeted sales for the four quarters of the current year to be 200,000 bottles, 150,000 bottles, 250,000 bottles, and 400,000 bottles, respectively. The management feels that an ending inventory of 10% of the subsequent quarter's sales is appropriate. What is the desired ending inventory for the second quarter? 15,000 bottles 20,000 bottles 25,000 bottles 40,000 bottles

Answer 1

The correct answer is C.

Step-by-step explanation:

Giving the following information:

The company estimated the budgeted sales for the four quarters of the current year to be:

Q1= 200,000 bottles

Q2= 150,000 bottles

Q3= 250,000 bottles

Q4= 400,000 bottles

The management feels that an ending inventory of 10% of the subsequent quarter's sales is appropriate.

Ending inventory Q2= 250,000*0.10= 25,000 bottles