Question

Vitale Hair Spray had sales of 27,000 units in March. A 60 percent increase is expected in April. The company will maintain 20 percent of expected unit sales for April in ending inventory. Beginning inventory for April was 1,350 units. How many units should the company produce in April?

Answer 1

Answer:

50,490 units

Explanation:

The computation of the number of units the company should produced is shown below:

= Expected sales units + ending inventory units - opening inventory units

where,

Opening inventory units is 1,350 units

Expected sales units is

= $27,000 + $27,000 × 60%

= $27,000 + $16,200

= 43,200 units

The ending inventory units is

= $43,200 × 20%

= 8,640 units

So, the units to be produced is

= 43,200 units + 8,640 units - 1,350 units

= 50,490 units