Liau Automotive produces and sells automobile batteries, the heavy-duty HD-240. The 2020 sales forecast is as follows.

Question:

Quarter...........................HD-240

1.......................................5,000
2.......................................7,000
3.......................................8,000
4.......................................10,000

The January 1, 2020, inventory of HD-240 is 2,000 units. Management desires an ending inventory each quarter equal to 40% of the next quarter’s sales. Sales in the first quarter of 2021 are expected to be 25% higher than sales in the same quarter in 2020.

Instructions

Prepare quarterly production budgets for each quarter and in total for 2020.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...

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