Use the following data to answer the following 3 questions: At the end of last year, Axel Corporation had an ending inventory of 2,100 scooters. In the current year, Axel estimates it will sell 5,000 units during the first quarter of the current year, with a 10% increase in sales each quarter. It is the company's policy to maintain an ending inventory equal to 20% of the next quarter's budgeted sales. Each scooter costs $120 to produce and sold for $200. 13. What are the required units to produce Quarter 3: A) 6,050 B) 6,171 C) 5,610 D) 7,381 14. How much is the budgeted sales revenue for the third quarter of the current year? A) $1,210,000 C) $1,476,200 D) $1,331,000 B) $1,234,200

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.