Electro Company manufactures an innovative automobile transmission for electric cars. Management predicts that ending finished goods inventory for the first quarter will be 123,200 units. The following unit sales of the transmissions are expected during the rest of the year: second quarter, 308,000 units; third quarter, 402,000 units, and fourth quarter, 467,000 units. Company policy calls for the ending finished goods inventory of a quarter to equal 40% of the next quarter's budgeted sales Prepare a production budget for both the second and third quarters that shows the number of transmissions to manufacture Answer is complete but not entirely correct ELECTRO COMPANY Production Budget Second and Third Quarters Second Quarter 308,000 160,800 468,800 (123,200) 345,600 Third Quarter Budgeted beginning inventory (units) Budgeted unit sales for quarter Required units of available production Budgeted beginning inventory (units) Units to be produced 402,000 186,800 588,800 (186,800) 402,000