Question

Microtech plans to sell 2,000 computers in April; 1,900 in May; and 2,000 in June. The company keeps 15% of the next month’s sales as ending inventory. How many units should Microtech produce in May? 1,885. 1,915. Amount cannot be determined due to insufficient information. 2,200.

Answer 1

Answer:

1915 units

Explanation:

Data provided:

Number of computer to sell in April = 2,000

Number of computer to sell in May = 1,900

Number of computer to sell in June = 2,000

Ending inventory = 15% of the next month's sale

Number of units to be produced in may = Number of sales units in may + The ending inventory - The ending inventory of the April

Therefore,

Number of units to be produced in may

= 1,900 + (15% of sales units of June) -  15% of sales unit of May

or

= 1,900 + (0.15 × 2,000) - (0.15 × 1,900)

or

= 1915 units