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    Shocker Company - Budget Production Level

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    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.

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    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.