Toyz Company produces scooters.Toyz Company has the following sales projections for the upcoming year: $$\begin{array} { | l | l | }
\hline \text { First quarter budgeted scooter sales in urits } & 20,000 \
\hline \text { Second quarter budgeted scooter sales in urits } & 35,000 \
\hline \text { Third quarter budgeted scooter sales in urits } & 22,000 \
\hline \text { Fourth quarter budgeted scooter sales in urits } & 30,000 \
\hline
\end{array}$$ Inventory at the beginning of the year was 4,000 scooters.Toyz Company wants to have 20% of the next quarter's sales in units on hand at the end of each quarter.How many scooters should Toyz Company produce during the first quarter?

Question

Toyz Company produces scooters.Toyz Company has the following sales projections for the upcoming year: $$\begin{array} { | l | l | } 
\hline \text { First quarter budgeted scooter sales in urits } & 20,000 \
\hline \text { Second quarter budgeted scooter sales in urits } & 35,000 \
\hline \text { Third quarter budgeted scooter sales in urits } & 22,000 \
\hline \text { Fourth quarter budgeted scooter sales in urits } & 30,000 \
\hline
\end{array}$$ Inventory at the beginning of the year was 4,000 scooters.Toyz Company wants to have 20% of the next quarter's sales in units on hand at the end of each quarter.How many scooters should Toyz Company produce during the first quarter?

Quizplus · Accepted Answer

First, we need to determine the sales for the first quarter:
$250,000 / 4 = $62,500 in sales for the first quarter.

Then, we need to determine how many scooters should be on hand at the end of the first quarter:
20% of $125,000 (sales for the first half of the year) = $25,000
$25,000 / $500 (the cost per scooter) = 50 scooters

Therefore, Toyz Company needs to have 50 scooters on hand at the end of the first quarter.

Finally, we can determine how many scooters need to be produced during the first quarter:
4,000 + 50 - 11,000 = 23,050 scooters

Therefore, the answer is D (23,000).

Toyz Company Produces Scooters Inventory at the Beginning of the Year Was 4,000 Scooters