Question

Production and sales estimates for June for Cardinal Co. are as follows: Estimated inventory (units), June 1 20,000 Desired inventory (units), June 30 19,000 Expected sales volume (units): Territory X 7,000 Territory Y 4,000 Territory Z 5,500 Unit sales price $20 The number of units expected to be manufactured in June is:________

a. 15,500
b. 13,500
c. 12,500
d. 11,000

Answer 1

a. 15,500

Step-by-step explanation:

The computation of the number of units expected in June is shown below:

Total Sales units is

= Area X + Area Y + Area Z

= 7,000 + 4,000 + 5,500

= 16,500

Given that

Opening Inventory = 20,000 units

Desired closing inventory = 19,000 units.

As we know that

Opening Inventory + Production - Sales = Closing Inventory

20,000 + Production - 16,500 = 19,000

So,

Production = 19,000 + 16,500 - 20,000

= 15,500

Therefore the correct option is A