Exercise 20-6 (Algo) Manufacturing: production budgets LO P1 Electro Company manufactures transmissions for electric cars. Management reports ending finished goods inventory for the first quarter at 237,000 units. The following unit sales are budgeted during the rest of the year: second quarter, 474,000 units; third quarter, 204,000 units; and fourth quarter, 456,500 units. Company policy calls for the ending finished goods inventory of a quarter to equal 50% of the next quarter's budgeted unit sales. Prepare a production budget for both the second and third quarters that shows the number of transmissions to manufacture. ELECTRO COMPANY Production Budget Second Quarter Third Quarter 474,000 204,000 Next period budgeted sales units 2,040 Desired ending inventory units Total required units Units to produce