Question

Oriole Company produces and sells automobile batteries, the heavy-duty HD-240. The 2020 sales forecast is as follows. Quarter HD-240 5,100 7,320 WN 8,280 10,430 The January 1, 2020, inventory of HD-240 is 2,040 units. Management desires an ending inventory each quarter equal to 40% of th quarter's sales. Sales in the first quarter of 2021 are expected to be 25% higher than sales in the same quarter in 2020. Prepare quarterly production budgets for each quarter and in total for 2020. ORIOLE COMPANY Production Budget Product HD-240 Quarter

Answer 1

ORIOLE COMPANY
Production budget
For the Year Ended 2020
	1st quarter	2nd quarter	3rd quarter	4th quarter	Year
Expected Sales	5,100	7,320	8,280	10,430
Add: Desired Ending inventory	7,320*40% = 2,928	8,280*40% = 3,312	10,430*40% = 4,172	5,100*125%*40% = 2,550
Total needs	8,028	10,632	12,452	12,980
Less: Beginning inventory	2040	7,320*40% = 2,928	8,280*40% = 3,312	10,430*40% = 4,172
Required production in unit	5,988	7,704	9,140	8,808	31,640

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