Question

The Waverly Company has budgeted sales for the year as follows:

Quarter sales in unit


1=12,000

2=14,000

3=18,000

4=16,000


The ending inventory of finished goods for each quarter should equal 25% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 3,000 units. Scheduled production for the second quarter (in units) is:



a.17,500 units.

b.16,500 units.

c.15,000 units.

d.13,000 units.

Answer 1

Production= 15,000 units

Step-by-step explanation:

Giving the following information:

Sales:

Q2=14,000

Q3=18,000

The ending inventory of finished goods for each quarter should equal 25% of the next quarter's budgeted sales in units.

To calculate the production for the second quarter, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

Production= 14,000 + (18,000*0.25) - (14,000*0.25)

Production= 15,000 units