Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2020 sales forecast is as follows.
| Quarter | HD-240 Production |
| 1 | 5,000 |
| 2 | 7,000 |
| 3 | 8,000 |
| 4 | 10,000 |
The January 1, 2020, Inventory of HD-240 is 2,000 unites. Management desires an ending inventory each quarter equal to 40% of the next quarter's sales. Sales in the first quarter of 2021 are expected to be 25% higher than sales in the same quarter in 2020.
Instructions
Prepare quarterly production budgets for each quarter and in total for 2020.
Solution
