Answer: 8800
Explanation:
Based on the information given in the question and since the company policy is to have a finished goods inventory at the end of each quarter equal to 20% of the next quarter's sales.
The budgeted production for the second quarter would be calculated as thus:
= Quarter 2 sales + (Quarter 3 sale × 20%) - (Quarter 2 sale × 20%)
= 8000 + (12,000 × 20%) - (8000 × 20%)
= 8000 + (12000 × 0.2) - (8000 × 0.2)
= 8000 + 2400 - 1600
= 8800