Production Budgeting Carry-It-All Company makes and sells two products: leather and vinyl briefcases. The sales forecasts for these briefcases for the next four quarters are as follows:

On January 1, Carry-It-All has a stock of 90 completed leather briefcases and 80 vinyl briefcases.
Experience indicates that Carry-It-All must maintain an inventory equal to one-half of the next quarter’s sales.
Required:
1. How many leather and vinyl briefcases must be produced during each of the first three quarters to meet sales and inventory demands?
2. Interpretive Question: Assume Carry-It-All is a wholesale merchandising company instead of a manufacturing company. How would the budget information provided in part (1) change?

Transcribed Image Text:

Leather Briefcases Vinyl Briefcases First quarter 120 110 Second quarter 160 170 Third quarter 240 220 Fourth quarter 280 250 Total.. 800 750