Dolce Co. estimates its sales at 180000 units in the first quarter and that sales will increase by 18000 units each quarter over the year. They have and desire a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Production in units for the third quarter should be budgeted at
A) 220500.
B) 207000.
C) 274500.
D) 216000.

Question

Quizplus · Accepted Answer

The correct answer is A.The production budget for the third quarter should be budgeted at 220500 units. This is because the company estimates its sales at 180000 units in the first quarter and that sales will increase by 18000 units each quarter over the year. They have and desire a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale.

Dolce Co Estimates Its Sales at 180000 Units in the First