Question

Houseman, Inc. anticipates sales of 50,000 units, 48,000 units, 51,000 units and 50,000 units in July, August, September and October, respectively. Company policy is to maintain an ending finished-goods inventory equal to 40% of the following month's sales. On the basis of this information, how many units would the company plan to produce in September

Answer 1

Answer:

50,600 units

Explanation:

The computation of the number of units to be produced in September is given below:

= sales + ending inventory - opening inventory

= 51,000 units + (40% of 50,000 units) - (40% of 51,000 units)

= 51,000 units + 20,000 units - 20,400 units

= 50,600 units