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 2,040 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.

Quarter

HD-240

1 5,100 2 7,440 3 8,350 4 10,350 TURNEY COMPANY Production Budget Pita@1ND.mlji) Quarter Year LINK TO TEXT VIDEO: SIMILAR EXERCISE VIDEO: APPLIED SKILLS

Explanation / Answer

Turney Company Production Budget Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Expected Unit Sales              5,100               7,440               8,350          10,350      31,240 Add : Desired Ending Inventory              1,860               2,088               2,588            1,594         8,129 Total Needed              6,960               9,528             10,938          11,944      39,369 Less : Begning Inventory              2,040               1,860               2,088            2,588         8,575 Unit to be Produced              4,920               7,668               8,850            9,356      30,794

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