Bowden Company forecasts sales for the third quarter at 10 000 units. The desired ending inventory for the second quarter is 2000 units and for the third quarter 3000 units. How many units must be produced in the third quarter?
A) 9000 units
B) 11 000 units
C) 12 000 units
D) 13 000 units

Question

Quizplus · Accepted Answer

To determine how many units must be produced in the third quarter, we need to use the following formula:

Units to be produced = Expected sales + Desired ending inventory - Beginning inventory

We are given that the forecasted sales for the third quarter are 10,000 units, the desired ending inventory for the second quarter is 2,000 units, and the desired ending inventory for the third quarter is 3,000 units.

However, we are not given the beginning inventory for the third quarter. Therefore, we need to calculate it using the formula:

Beginning inventory = Desired ending inventory for previous quarter

In this case, the desired ending inventory for the second quarter is given as 2,000 units, so the beginning inventory for the third quarter would be 2,000 units.

Putting it all together, we get:

Units to be produced = 10,000 + 3,000 - 2,000 = 11,000 units

Therefore, the best choice is B, 11,000 units.

Bowden Company Forecasts Sales for the Third Quarter at 10