Budgeted sales for the first six months the year for Hooper Corporation are listed below: $\begin{array}{lllllll}
&JANUARY&FEBRUARY&MARCH&APRIL&MAY&JUNE\\hline
UNITS:&5,000&6,000&7,000&6,000&4,000&3,000
\end{array}$ Hooper Corporation has a policy of maintaining an inventory of finished goods equal to 35 percent of the next month's budgeted sales.How many units has Hooper Corporation budgeted to produce in the first quarter of the year?

Question

Quizplus · Accepted Answer

To calculate the budgeted production for the first quarter, we need to consider the sales and the inventory policy. The production for each month is calculated as: Production = Sales + Ending Inventory - Beginning Inventory. The ending inventory for each month is 35% of the next month's sales. Calculating for each month:  - January: 5,000 + (0.35 * 6,000) - (0.35 * 5,000) = 5,350  - February: 6,000 + (0.35 * 7,000) - (0.35 * 6,000) = 6,350  - March: 7,000 + (0.35 * 6,000) - (0.35 * 7,000) = 6,650  Total production for the first quarter = 5,350 + 6,350 + 6,650 = 18,350 units.

Budgeted Sales for the First Six Months the Year for Hooper