Question

Houseman, Inc. anticipates sales of 43,000 units, 41,000 units, and 44,000 units in July, August, and September, respectively. Company policy is to maintain an ending finished-goods inventory equal to 30% of the following month's sales. On the basis of this information, how many units would the company plan to produce in July?

Answer 1

Total= 42,400 units

Step-by-step explanation:

Giving the following information:

Houseman, Inc. anticipates sales of 43,000 units, 41,000 units, and 44,000 units in July, August, and September, respectively. Company policy is to maintain an ending finished-goods inventory equal to 30% of the following month's sales.

We will assume that the beginning inventory for July equals the 30% policy.

Production:

Sales for July= 43,000

Ending inventory= (41,000*0.3)= 12,300

Beginning inventory= (43,000*0.3)= (12,900)

Total= 42,400 units