Question 28 (2 points) Bear, Inc. estimates its sales at 200,000 units in the fi

Question

Question 28 (2 points) Bear, Inc. estimates its sales at 200,000 units in the first quarter and that sales will increase by 20,000 units each quarter over the year They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $35, 40% of the sales are for cash, 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Production in units for the third quarter should be budgeted at 0 a) 230,000. b) 305,000 c) 245,000. d) 240,000. Save

Explanation / Answer

Answer:

Option c is correct.

200,000 + (2x 20,000) + [200,000 + (3x 20,000)] (.25)x [200,000 + (2 x 20,000)] (.25) = 245,000

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