The ending inventory of finished goods for each quarter should equal 20% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 3,600 units. Scheduled production for the second quarter is (in units) :

Question

Business

Jesus Vaughan

19 August, 16:06

The ending inventory of finished goods for each quarter should equal 20% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 3,600 units. Scheduled production for the second quarter is (in units) :

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Answers (1)

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Issac Martin · Answer 1

Instructions are below.

Explanation:

Giving the following information:

The ending inventory of finished goods for each quarter should equal 20% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 3,600 units.

We weren't provided with enough information to solve the problem. But, I will leave the formula and a small example to guide an answer.

Purchases = sales + desired ending inventory - beginning inventory

For example:

Sales 2nd Quarter = 27,000 units

Sales 3rd Quarter = 45,000 units

Production budget (in units):

Sales = 27,000

Desired ending inventory = (45,000*0.20) = 9,000

Beginning inventory = (3,600)

Total = 32,400 units