MORGAN Merchandising is preparing its Production Budget for the 3rd Quarter of 2020. Its Sales Budget is prepared using a budgeted sales price per unit agreed upon at the beginning of the year. To help in the Production budget preparation, the following information are given:  Inventories at the end of 2019 can be sold for a total of ₱225,000 at a sales price of ₱250 per unit.   Production runs are only done at the start of each quarter.   A minimum of 200 untis are to be maintained at the end of each quarter to serve as buffer stocks.  Budgeted quantities sold for the 1st quarter of 2020 is 4,500 units.   It is forecasted that the same quantities will be sold per month of each quarter.  It is estimated that quantities sold will increase by 500 units at the start of each quarter. MORGAN Merchandising estimates a gross profit rate of 35%.  What is the number of units to be produced for March 2020?   4,800   4,500   3,800   0

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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MORGAN Merchandising is preparing its Production Budget for the 3rd Quarter of 2020. Its Sales Budget is prepared using a budgeted sales price per unit agreed upon at the beginning of the year. To help in the Production budget preparation, the following information are given:

  1.  Inventories at the end of 2019 can be sold for a total of ₱225,000 at a sales price of ₱250 per unit. 
  2.  Production runs are only done at the start of each quarter. 
  3.  A minimum of 200 untis are to be maintained at the end of each quarter to serve as buffer stocks. 
  4. Budgeted quantities sold for the 1st quarter of 2020 is 4,500 units. 
  5.  It is forecasted that the same quantities will be sold per month of each quarter. 
  6. It is estimated that quantities sold will increase by 500 units at the start of each quarter.
  7. MORGAN Merchandising estimates a gross profit rate of 35%.

 What is the number of units to be produced for March 2020?

 
  1. 4,800

     
  2. 4,500

     
  3. 3,800

     
  4. 0

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