Budgeted sales for the first six months the year for Stewart Corporation are listed below:

JANUARY FEBRUARY MARCH APRIL MAY JUNE

UNITS: 5,000 6,000 7,000 6,000 4,000 3,000

Stewart 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 Stewart Corporation budgeted to produce in the first quarter of the year?

Question

Budgeted sales for the first six months the year for Stewart Corporation are listed below:

	JANUARY	FEBRUARY	MARCH	APRIL	MAY	JUNE
UNITS:	5,000	6,000	7,000	6,000	4,000	3,000

Stewart 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 Stewart Corporation budgeted to produce in the first quarter of the year?

Quizplus · Accepted Answer

The correct answer is A.Stewart Corporation has a policy of maintaining an inventory of finished goods equal to 35 percent of the next month's budgeted sales. So, the budgeted production for the first quarter of the year is:January: 5,000 units + 35% of February's sales (6,000 units) = 5,000 units + 2,100 units = 7,100 unitsFebruary: 6,000 units + 35% of March's sales (7,000 units) = 6,000 units + 2,450 units = 8,450 unitsMarch: 7,000 units + 35% of April's sales (6,000 units) = 7,000 units + 2,100 units = 9,100 unitsTotal budgeted production for the first quarter of the year: 7,100 units + 8,450 units + 9,100 units = 24,650 units

Budgeted Sales for the First Six Months the Year for Stewart