Question

Furniture, Inc., estimates the following number of mattress sales for the first four months of 2013: Month Sales January 10,000 February 14,000 March 13,000 April 16,000 Finished goods inventory at the end of December is 3,000 units. Target ending finished goods inventory is 30% of the next month's sales. How many mattresses need to be produced in the first quarter (January, February, March) of 2013?

Answer 1

The 38,800 mattresses need to be produced in the first quarter (January, February, March) of 2013

Step-by-step explanation:

The computation of the mattresses need to be produced in the first quarter is shown below:

= Total sales in first quarter + ending finished goods inventory - beginning finished goods inventory

where,

Total sales in the first quarter = January Sales + February sales + March sales

= 10,000 + 14,000 + 13,000

= 37,000 units

Ending finished goods inventory = April sales × percentage given

= 16,000 × 30%

= 4,800 units

And, the Beginning Finished goods inventory is 3,000 units

Now put these values to the above formula

So, the value would be equal to

= 37,000 + 4,800 - 3,000

= 38,800 units