Electro Company manufactures an innovative automobile transmission for electric cars. Management predicts that ending finished goods inventory for the first quarter will be 75,000 units. The following unit sales of the transmissions are expected during the rest of the year: second quarter, 450,000 units; third quarter, 525,000 units; and fourth quarter, 475,000 units. Company policy calls for the ending finished goods inventory of a quarter to equal 20% of the next quarters budgeted sales. (Ending inventory for the first quarter does not comply with company policy.)

Prepare a production budget for both the second and third quarters that shows the number of transmissions to manufacture.

ELECTRO COMPANY
Production Budget
Second and Third Quarters
	Second Quarter	Third Quarter
Budgeted ending inventory (units)
Budgeted unit sales for quarter
Required units of available production
Budgeted beginning inventory (units)
Units to be produced