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Sheffield Corp. estimates its sales at 240000 units in the first quarter and that sales will increase by 24000 units each quarter over the year. They have, and desire, a 25% ending inventory of current quarter's sales in units. Each unit sells for $35. 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

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anthougo

Answer:

Sheffield Corp.

The Production in units for the third quarter should be budgeted at:

= 294,000 units.

Explanation:

a) Data and Calculations:

                                       Quarter 1     Quarter 2      Quarter 3       Quarter 4

Sales units                      240,000       264,000       288,000         312,000

Ending inventory              60,000         66,000         72,000           78,000

Units available for sale  300,000       330,000       360,000        390,000

Less Beginning inventory         0         60,000          66,000          72,000

Production units            300,000       270,000       294,000         318,000

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