Sheffield Company produces and sells automobile batteries, the heavy-duty HD-240

Question

Sheffield Company produces and sells automobile batteries, the heavy-duty HD-240. The 2017 sales forecast is as follows. Quarter HD-240 5,100 7,270 3 8,110 10,450 The January 1, 2017, inventory of HD-240 is 2,040 units. Management desires an ending inventory each quarter equal to 40% of the next quarter's sales, sales in the first quarter of 2018 are expected to be 25% higher than sales in the same quarter in 2017 Prepare quarterly production budgets for each quarter and in total for 2017 SHEFFIELD COMPANY Quarter Year

Explanation / Answer

Production budget :

Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Sales unit 5100 7270 8110 10450 Add: Desired ending inventory 2908 3244 4180 2550 Total 8008 10514 12290 13000 Less: Beginning inventory -2040 -2908 -3244 -4180 Production units 5968 7606 9046 8820 31440

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