Exercise 20-12 Manufacturing: Preparing production budgets (for two periods) LO P1 Electro Company manufactures an innovative automobile transmission for electric cars. Management predicts that ending finished goods inventory for the first quarter will be 101,500 units. The following unit sales of the transmissions are expected during the rest of the year: second quarter, 203,000 units; third quarter, 331,000 units; and fourth quarter, 216,000 units. Company policy calls for the ending finished goods inventory of a quarter to equal 50% of the next quarter's budgeted sales. (Ending inventory for the first quarter does not comply with company policy.) Prepare a production budget for both the second and third quarters that shows the number of transmissions to manufacture. ELECTRO COMPANY Production Budget Second and Third Quarters Second Quarter Third Quarter Budgeted ending inventory (units) Budgeted unit sales for quarter Required units of available production Budgeted beginning inventory (units) Units to be produced