Superior Industries sales budget shows quarterly sales for the next year as follows:

Quarter 1–10,000;
Quarter 2–8,000;
Quarter 3–12,000;
Quarter 4–14,000.

Company policy is to have a finished goods inventory at the end of each quarter equal to 20% of the next quarter's sales. Budgeted production for the second quarter should be:______

Respuesta :

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