A Company Provided the Following Information on Its Projected Sales

question 7

Multiple Choice

A company provided the following information on its projected sales for the coming year: Assume that the beginning inventory is 5,000 units,and that the company policy is to have 25% of the next quarter's sales in ending inventory.Which quarter will have the lowest production?
$\begin{array}{lrrrr}&\text { 1st Quarter } &\text { 2nd Quarter } &\text { 3rd Quarter } &\text { 4th Quarter }\\\text { Units } & 50,000 & 40,000 & 30,000 & 80,000 \\\text { Average selling price } & \$ 5 & \$ 5 & \$ 5 & \$ 6\end{array}$

• A)Quarter 1
• B)Quarter 2
• C)Quarter 3
• D)Quarter 4

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Definitions:

Marginal Cost

The financial impact of producing an additional unit of a product or service.

Cookies

Small files created by a web server while a user is browsing a website and are stored on the user's computer, designed to hold a modest amount of data specific to a particular client and website.

Total Variable Cost

Total Variable Cost is the sum of all costs that vary with the level of production or output, including materials, labor, and other expenses that change in proportion to activity.

Fixed Cost

Fixed cost refers to expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.