To determine the number of units that should be produced in January 2021, we need to calculate the desired ending inventory for February 2021, which is equal to 30% of the budgeted unit sales for February 2021:
Ending inventory = 0.30 x 120,000 = 36,000 units
We also know that the company had 30,600 units of inventory on hand on December 31, 2020. Therefore, the total number of units that the company needs to have available for sale in February 2021 is:
Total units needed = 120,000 + 36,000 - 30,600 = 125,400 units
Since the company wants to have an ending inventory of 30% of the next month's budgeted unit sales, the company also needs to have 30% of 102,000 units (the budgeted unit sales for January 2021) in inventory at the end of January 2021:
Ending inventory for January 2021 = 0.30 x 102,000 = 30,600 units
Therefore, the company needs to produce enough units in January 2021 to meet the following demand:
Total demand for January 2021 = 102,000 + 36,000 - 30,600 = 107,400 units
So the answer is 107,400 units.