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1 February, 13:27

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 4,000 units. Scheduled production for the second quarter is (in units) :

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  1. 1 February, 15:00
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    Production for 2nd Quarter = 15,000 units

    Explanation:

    given data

    ending inventory of finished goods = 25 %

    finished goods inventory at year start = 4,000 units

    so we consider here Quarter sales in unit

    1 = 12,000

    2 = 14,000

    3 = 18,000

    4 = 16,000

    solution

    we get here Production for 2nd Quarter that is

    Production for 2nd Quarter = Quarter 2 sale + Desired Q2 ending inventory - Beginning Q2 inventory ... 1

    so it will be as

    Production for 2nd Quarter = Quarter 2 sale + (25% of Q3 Sale) - (25% of Q2 sale)

    put here value

    Production for 2nd Quarter = 14000 + (18000 * 25%) - (14000 * 25%)

    Production for 2nd Quarter = 14000 + 4500 - 3500

    Production for 2nd Quarter = 15,000 units
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