Question

The Cardinal Company had a finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months were: January - 200,000 units; February - 180,000 units; March - 210,000 units; and April - 230,000 units. The Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following months sales.

Answer 1

Budgeted units of inventory for March 31 is 46000.

What is Ending Inventory?

The product that remains in the company's possession at the end of the fiscal year is referred to as ending inventory. These goods are prepared to be distributed to the client and sold in the upcoming fiscal year.

Solution:

Finished goods inventory = 55,000 units

Projected sales for January = 200,000 units

Projected sales for February = 180,000 units

Projected sales for March = 210,000 units

Projected sales for April = 230,000 units

Desired ending finished goods inventory = 20%

Calculation:

Ending inventory of March = Desired ending finished goods inventory * Projected sales for April

= 20% * 230,000

= 46,000 units

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Correct Question:

The Cardinal Company had a finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months were: January - 200,000 units; February - 180,000 units; March - 210,000 units; and April - 230,000 units. The Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following month's sales.

What is the budgeted units of inventory for March 31?

a. 42,000

b. cannot be determined from the data given.

c. 36,000

d. 46,000