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Shocker Corporation's sales budget shows quarterly sales for the next year as follows: Unit sales Quarter...

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: 8,000 units 8,800 units 8,400 units 7,200 units

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Answer #1

Budgeted production for the second quarter of the next year would be:  8,800 units

Production budget
Quarter 2
Unit sales           8,000
Add: Desired ending inventory           2,400 (12,000*20%)
Total needed         10,400
Less: Beginning inventory           1,600 (8,000*20%)
Units produced           8,800
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