unit3 quiz2

Strum Enterprises is a boutique guitar manufacturer. The company produces both acoustic and electric guitars for rising and established professional musicians. Claire Strum, the company's sales manager, prepared the following sales forecast for 2015. The forecasted sales prices include a 5 percent increase in the acoustic guitar price and a 10 percent increase in the electric guitar price, to cover anticipated increases in raw materials prices. On December 31, 2014, Strum had 60 acoustic guitars in stock-fewer than the desired inventory level of 80 guitars, based on the following quarter's sales. The company has budgeted for sales of 470 acoustic guitars in the first quarter of 2016. Strum wants to maintain an ending inventory equal to 20 percent of the following quarter's sales. Prepare the 2015 production budget for acoustic guitars