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Fiwrt Corporation manufactures stainless steel coffee mugs, and the expected sales for the next three months are provided. Fiwrt likes to maintain a finished goods inventory equal to 20% of the next month's estimated sales. Based on this information, how many mugs should Fiwrt plan on producing during the month of November?

A. 46,000 units
B. 35,400 units
C. 43,600 units
D. 52,800 units

User Baerkins
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1 Answer

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Final answer:

To determine how many mugs Fiwrt should produce in November, it is necessary to have expected sales figures for December to calculate the 20% inventory carryover. Without December's sales data, the question cannot be answered with the options provided.

Step-by-step explanation:

To calculate the number of mugs Fiwrt Corporation should plan on producing during the month of November, we need to consider both the expected sales for November and the desired inventory to maintain for December. Since they wish to maintain a finished goods inventory equal to 20% of the next month's sales, we first calculate 20% of December's expected sales. If the expected sales for December are not given in the question, we cannot determine the exact number without this critical piece of information.

If December's expected sales were, for example, 50,000 units then the desired inventory for the end of November would be 10,000 units (which is 20% of 50,000). Suppose the expected sales for November are 40,000 units; Fiwrt would need to produce enough to meet both the sales and the inventory requirements. This would be 40,000 units for sales plus 10,000 units for inventory, totaling 50,000 units. Without the exact figure for December's expected sales, it is impossible to choose the correct answer from the options provided.

User Michelepatrassi
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