Expected quarterly unit sales for tents at Sandy's Camping Gear are 7,500, 8,800, 3,200, and 2,900 for the next 2 years. At the start of the current year, inventory of finished tents on hand is 750 tents. Sandy's has a desired ending inventory of 20 percent of next quarter's sales. Create the production budget in numbers of tents for quarters one through four for the current year.

Question

Business

Sandra Lara

15 September, 20:29

Expected quarterly unit sales for tents at Sandy's Camping Gear are 7,500, 8,800, 3,200, and 2,900 for the next 2 years. At the start of the current year, inventory of finished tents on hand is 750 tents. Sandy's has a desired ending inventory of 20 percent of next quarter's sales. Create the production budget in numbers of tents for quarters one through four for the current year.

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Kiara Holden · Answer 1

Q1 = 9,510

Q2 = 7,680

Q3 = 3,140

Q4 = 3,820

Explanation:

Giving the following information:

Expected quarterly unit sales for tents at Sandy's Camping Gear are 7,500, 8,800, 3,200, and 2,900.

At the start of the current year, the inventory of finished tents on hand is 750 tents. The desired ending inventory of 20 percent of next quarter's sales.

The production budget for each month has the following structure:

Production budget = sales + ending inventory - beginning inventory

Q1 = 7,500 + (8,800*0.20) - 750 = 9,510

Q2 = 8,800 + (3,200*0.20) - 1,760 = 7,680

Q3 = 3,200 + (2,900*0.20) - 640 = 3,140

Q4 = 2,900 + (7,500*0.20) - 580 = 3,820