Question

Each month’s ending inventory of finished units should be 60% of the next month’s sales. The April 30 finished goods inventory is 138 units. Compute Champ’s budgeted production (in units) for May.

Answer 1

Answer:

230

Explanation:

Calculation for Champ’s budgeted production (in units) for May

CHAMP INC.

Production Budget For month ended May 31

Sales during the month 230

Less: Opening Stock (138)

(60%*230)

Sales units required to produce in May 92

(230-128)

Sales during June 230

Add: Closing stock of May 138

(230*60%)

Budgeted production (in units) for May: 230 (138+92)

Therefore Champ’s budgeted production (in units) for May will be 230