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14 April, 18:39

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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  1. 14 April, 19:59
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    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
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