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Shocker Company - Budget Production Level

Shocker Company's sales budget shows quarterly sales for the next year as:

Unit sales
Quarter 1..... 10,000 units
Quarter 2..... 8,000 units
Quarter 3..... 12,000 units
Quarter 4..... 14,000 units

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 of the next year would be:
7,200 units.
8,000 units.
8,800 units.
8,400 units.

Solution Summary

This solution is comprised of a detailed calculation to find the budgeted production for the Shocker's second quarter of the next year.