Question 7

Clovis, Inc. is preparing a quarterly production budget for this coming year. In the process of preparing this budget, the desired ending finished goods inventory for the first quarter is:

a) the beginning finished goods inventory for the second quarter.

b) always less than the beginning finished goods inventory for the first quarter regardless of the level of expected sales.

c) always the same as the beginning finished goods inventory for the first quarter regardless of the level of expected sales.

d) always more than the beginning finished goods inventory for the first quarter regardless of the level of expected sales.