Exercise 7-6 (Algo) Manufacturing: production budgets LO P1 Electro Company manufactures transmissions for electric cars. Management reports ending finished goods inventory for the first quarter at 133,800 units. The following unit sales are budgeted during the rest of the year: second quarter, 223.000 units; third quarter 413,000 units; and fourth quarter, 264,500 units. Company policy calls for the ending finished goods inventory of a quarter to equal 60% 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 Next period budgeted sales units Desired ending inventory units Total required units Units to produce Second Quarter Third Quarter