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Andrei [34K]
3 years ago
11

Aloan Co. provides the following sales forecast for the next three months: January February March Sales units 3,000 4,200 5,000

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:
Business
1 answer:
Natalka [10]3 years ago
6 0

Answer:

Total= 3,120 units

Explanation:

Giving the following information:

production budget:

January= 3,000 units

February= 4,200 units

March= 5,000 units

The company wants to end each month with ending finished goods inventory equal to 10% of the next month’s sales.

Beginning inventory= 300 units.

To calculate the production for any month, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

<u>January:</u>

Sales= 3,000

Desired ending inventory= (4,200*0.1)= 420

Beginning inventory= (300)

Total= 3,120 units

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