Question

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 280 units. The budgeted production units for January are:

Answer 1

Answer:

Budgeted production in January 2,910 units

Explanation:

Calculation for the budgeted production units for January

Using this formula

Budgeted production in January= Budgeted sales + Desired ending inventory - Beginning inventory available

Let plug in the formula

Budgeted production in January=2,800 + (3,900*10%) - 280

Budgeted production in January=$2,800+$390-280

Budgeted production in January= 2,910 units

Therefore the Budgeted production in units for January are: 2,910 units