The following are the estimated monthly sales and desired ending finished goods inventories for Blushing Company for the fourth quarter ending December 31, as well as the month immediately before and after:
Month Sales Ending Inventory
September 30,000 units 8,000 units
October 40,000 units 20% of next month’s sales
November 50,000 units 20% of next month’s sales
December 60,000 units 20% of next month’s sales
January 20,000 units 10% of next month’s sales
The unit selling price is $25. Materials cost per unit is $5. Direct labor required per unit is 0.1 hour. The direct labor rate is $20.
The multiperiod sales budget should show total budgeted sales in dollars for the fourth quarter to be
a.$5,000,000
b.$4,250,000
c.$3,750,000
d.$3,000,000
