Totts company produces Jump Ropes. It has the following Sales Projections for th

Question

Totts company produces Jump Ropes. It has the following Sales Projections for the upcoming year: First Quarter Budgeted Jump Rope Sales in Units: 25,000 Second Quarter Budgeted Jump Rope Sales in Units: 80,000 Third Quarter Budgeted Jump Rope Sales in Units: 16,000 Fourth Quarter Budgeted Jump Rope Sales in Units: 26,000 Inventory at the beginning of the year was 4,400 Jump Ropes. Totts Company wants to have 10% of the next quarter's sales in units on hand at the end of each quarter. How many Jump Ropes should the company produce during the first quarter?

Explanation / Answer

Calculate production units during first quarter ;

So 28600 Jump Ropes should the company produce during the first quarter.

First quarter Sales units 25000 Add: Desired ending inventory (80000*10%) 8000 Total 33000 Less; Beginning inventory -4400 Production units 28600

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