Electro Company manufactures an innovative automobile transmission for electric cars. Management
predicts that ending finished goods inventory for the first quarter will be 52,200 units. The following unit
sales of the transmissions are expected during the rest of the year: second quarter, 261,000 units: third
quarter, 492,000 units, and fourth quarter, 406,500 units. Company policy calls for the ending finished
goods 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.