Totz Company produces jump ropes. Totz Company has the following sales projections for the upcoming year: First quarter budgeted jump rope sales in units 23 comma 000 Second quarter budgeted jump rope sales in units 70 comma 000 Third quarter budgeted jump rope sales in units 17 comma 000 Fourth quarter budgeted jump rope sales in units 26 comma 000 Inventory at the beginning of the year was 3 comma 600 jump ropes. Totz Company wants to have 10 % of the next quarter's sales in units on hand at the end of each quarter. How many jump ropes should Totz Company produce during the first quarter?

Question

Dominique Ritter

Business

9 September, 20:22

Totz Company produces jump ropes. Totz Company has the following sales projections for the upcoming year: First quarter budgeted jump rope sales in units 23 comma 000 Second quarter budgeted jump rope sales in units 70 comma 000 Third quarter budgeted jump rope sales in units 17 comma 000 Fourth quarter budgeted jump rope sales in units 26 comma 000 Inventory at the beginning of the year was 3 comma 600 jump ropes. Totz Company wants to have 10 % of the next quarter's sales in units on hand at the end of each quarter. How many jump ropes should Totz Company produce during the first quarter?

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Answers (1)

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Emmanuel Cameron · Answer 1

1st quarter:

Sales budget = 26,400 units

Explanation:

Giving the following information:

First-quarter budgeted jump rope sales in units 23,000

Second-quarter budgeted jump rope sales in units 70,000

Inventory at the beginning of the year was 3,600 jump ropes.

Totz Company wants to have 10 % of the next quarter's sales in units on hand at the end of each quarter.

To determine the production budget, we need to take into account the beginning inventory, the sales for the quarter and the ending inventory.

Sales budget = sales for the quarter + ending inventory - beginning inventory

1st quarter:

Sales budget = 23,000 + (70,000*0.10) - 3,600 = 26,400 units