Question

Industries sales budget shows quarterly sales for the next year as​ follows: Quarter 1dash17 comma 000​; Quarter 2dash15 comma 000​; Quarter 3dash19 comma 000​; Quarter 4dash21 comma 000. Company policy is to have a target​ finished-goods inventory at the end of each quarter equal to 25 % of the next​ quarter's sales. Budgeted production for the second quarter of next year would​ be: 1. 19 comma 000 units 2. 12 comma 250 units 3. 19 comma 750 units 4. 16 comma 000 units

Answer 1

The correct answer is D.

Step-by-step explanation:

Giving the following information:

Quarter 1: 17,000​;

Quarter 2: 15,000​;

Quarter 3: 19,000​;

Quarter 4: 21,000.

Company policy is to have a target​ finished-goods inventory at the end of each quarter equal to 25 % of the next​ quarter's sales.

2nd Q production:

Sales= 15,000

Ending inventory= 0.25*19,000= 4,750

Beginning inventory= (15,000*0.25)= (3,750)

Total= 16,000 units