Company R sells coffee mugs for $4 each. The following is to know about Company R's sales budget:

Q1 Q2 Q3 Q4

Budgeted Sales. $130,000. $170,000. $120,000 $108,000

The Company's policy is to produce enough mugs to have 20% of the following quarter's budgeted sales volume on hand plus a cushion of an additional 2,500 mugs. If Company R started the year with 12,000 mugs in inventory, what is the production budget (in mugs) for Q3?