Question

Masde Corporation produces and sells Product CharlieD. To guard against stockouts, the company requires that 25% of the next month's sales be on hand at the end of each month. Budgeted sales of Product CharlieD over the next four months are...
Budgeted sales in units

June - 40,000

July - 60,000

August - 50,000

September - 80,000

Budgeted production for August would be:

Answer 1

Answer:

57,500

Explanation:

Total required units:

= Expected unit sales + Desired ending finished goods unit

= 50,000 + (25% × 80,000)

= 50,000 + 20,000

= 70,000

Budgeted production for August would be:

= Total required units - Beginning finished goods unit

= 70,000 - (25% × 50,000)

= 70,000 - 12,500

= 57,500

Therefore, the budgeted production for August would be 57,500.