Chapter 6, Problem 6.18MCQ

Production budget. 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 target finished-goods inventory at the end of each quarter equal to 20% of the next quarter’s sales. Budgeted production for the second quarter of next year would be:

1. 1. 7,200 units;
2. 2. 8,800 units;
3. 3. 12,000 units;
4. 4. 10,400 units