Question: Electro Company manufactures an innovative automobile transmission for electric cars
Electro Company manufactures an innovative automobile transmission for electric cars. Management predicts that ending inventory for the first quarter will be 75,000 units. The following unit sales of the trans-missions 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 inventory of a quarter to equal 20% of the next quarter’s budgeted sales. Prepare a production budget for both the second and third quarters that shows the number of transmissions to manufacture.
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