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30 June, 16:14

The Waverly Company has budgeted sales for the year as follows:

Quarter sales in unit

1=12,000

2=14,000

3=18,000

4=16,000

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 3,000 units. Scheduled production for the second quarter (in units) is:

a. 17,500 units.

b. 16,500 units.

c. 15,000 units.

d. 13,000 units.

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Answers (1)
  1. 30 June, 16:40
    0
    Production = 15,000 units

    Explanation:

    Giving the following information:

    Sales:

    Q2=14,000

    Q3=18,000

    The ending inventory of finished goods for each quarter should equal 25% of the next quarter's budgeted sales in units.

    To calculate the production for the second quarter, we need to use the following formula:

    Production = sales + desired ending inventory - beginning inventory

    Production = 14,000 + (18,000*0.25) - (14,000*0.25)

    Production = 15,000 units
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