Question

Ruiz Co. provides the following unit sales forecast for the next three months: Sales units January February March 3,000 4,200 5,000 8 01:10:10 The company wants to end each month with ending finished goods inventory equal to 10% of the next month's sales. Finished goods inventory on December 31 is 300 units. The budgeted production units for January are____________.
a. 3,000 units.
b. 3,420 units.
c. 0 3,720 units.
d. 0 3,120 units.
e. 0 2,880 units.

Answer 1

Answer:

d. 0 3,120 units.

Explanation:

Consider the following formula to calculate the budgeted production

= Budgeted sales + Desired ending inventory - Beginning inventory available

= 3,000 + (4,200*10%) - 300  Setting the values of the previous formula.

= 3120 units