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Montano1993 [528]
3 years ago
6

Electro Company manufactures an innovative automobile transmission for electric cars. Management predicts that ending finished g

oods inventory for the first quarter will be 196,200 units. The following unit sales of the transmissions are expected during the rest of the year: second quarter, 327,000 units; third quarter, 221,000 units; and fourth quarter, 256,000 units. Company policy calls for the ending finished goods inventory of a quarter to equal 60% of the next quarter's budgeted sales.Prepare a production budget for both the second and third quarters that shows the number of transmissions to manufacture.
Business
1 answer:
Korolek [52]3 years ago
3 0

Answer:

\left[\begin{array}{ccc}-&Q2&Q3\\Sales&327,000&221,000\\Ending&132,600&153,600\\Beginning&196,200&132,600\\Production&263,400&242,000\\\end{array}\right]

Explanation:

Ending: 60% of nex quearter

q3 221,000 x 60% = 132,600 ending of q2 (therefore beginning of q3

q4  256,000 x 60% = 153,600 ending of q3

begining of q2 is ending of q1 196,200

Production:

sales + desired ending inventory - beginning units

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