The firm has 5000 and 500 T-shirts in its inventory at the beginning of Q1.

The firm has 5,500t-shirts in its inventory at the beginning of Q1. The firm's desired ending inventory level for any quarter is 25% of the following quarter's budgeted sales. The firm receives cash for 75% of its sales in the same quarter as the sale and collects the remaining 25% in the quarter following the sale. 1) How many t-shirts does the firm need to produce (what is the required production) in Q2? 2) How much cash will the company collect in Q2