Question

Betz Company's sales budget shows the following projections for next year: Sales in units First Quarter. 60,000 Second Quarter. 80,000 Third Quarter. 45,000 Fourth Quarter. 55,000 Inventory at the beginning of the year was 18,000 units. The finished goods inventory at the end of each quarter is to equal 30% of the next quarter's budgeted unit sales. How many units should be produced during the first quarter? A) 24,000 B) 48,000 C) 66,000 D) 72,000.

Answer 1

The number of units that should be produced during the first quarter is: C) 66,000.

Units production:

Using this formula

Number of units produced = Ending inventory + Units sold + Beginning inventory

Let plug in the formula

Number of units produced= (30% × 80,000) + 60,000 − 18,000

Number of units produced= 24,000 + 60,000 − 18,000

Number of units produced=66,000

Inconclusion the number of units that should be produced during the first quarter is: C) 66,000.

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