Turney Company produces and sells automobile batteries, the heavy-duty HD-240. T

Question

Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2017 sales forecast is as follows.

Quarter

HD-240

The January 1, 2017, inventory of HD-240 is 2,160 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.

Quarter

HD-240

Explanation / Answer

1 2 3 4 Year Expected Unit Sales 5400 7430 8450 10230 Add: Desired Ending Finished Goods Unit 2972 3380 4092 2700 Total Required Units 8372 10810 12542 12930 Less: Beginning Finished Goods Unit 2160 2972 3380 4092 Required Production Units 6212 7838 9162 8838 32050

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