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Totz Company produces jump ropes. Totz Company has the following sales projections for the upcoming​ year:First quarter budgeted jump rope sales in units​17,000Second quarter budgeted jump rope sales in units​20,000Third quarter budgeted jump rope sales in units​20,000Fourth quarter budgeted jump rope sales in units​25,000Inventory at the beginning of the year was​ 4,500 jump ropes. Totz Company wants to have​ 20% of the next​ quarter's sales in units on hand at the end of each quarter. How many jump ropes should Totz Company produce during the first​ quarter?

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Kolawole845

Answer:

Production budget for First quarter= 16,500 units

Explanation:

The production budgeted for a particular period is the expected units to be produced after adjusting the sales budget figures for opening and closing inventories.

Production = Sales volume + closing inventory - opening inventory

Closing inventory = 20% × second quarter sales

                           = 20% × 20,000 = 4,000 units

Production budget for the first quarter

=17,000 + 4000 -4500

= 16,500 units

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