Question

Budgeted Sales for January: 8,000 Units Budgeted Sales for February: 10,000 Units Budgeted Sales for March: 12,000 Units Beginning Finished Goods for January: 3,000 Units Pevensie Inc. plans to have ending finished goods inventory of 20% of next month's projected sales. What are the budgeted total required production units for February?

Answer 1

Answer:

Production= 10400 units

Explanation:

Giving the following information:

Budgeted Sales for January: 8,000 Units

Budgeted Sales for February: 10,000 Units

Budgeted Sales for March: 12,000 Units

Beginning Finished Goods for January: 3,000

Units Pevensie Inc. plans to have an ending finished goods inventory of 20% of next month's projected sales.

We will assume that the ending finished goods of January reaches 20% required for February.

February:

(+)Budgeted Sales for February= 10,000 Units

(+)Ending finished goods= 12000*0,20= 2400 units

(-)Beginning finished goods inventory= 2000 units

Production= 10000+2400-2000= 10400 units