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A company budgeted unit sales of 204,000 units for January, 2013 and 240,000 units for February 2013. The company has a policy of having an inventory of units on hand at the end of each month equal to
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A company budgeted unit sales of 204,000 units for January, 2013 and 240,000 units for February 2013. The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month's budgeted unit sales. If there were 61,200 units of inventory on hand on December 31, 2012, how many units should be produced in January, 2013 in order for the company to meet its goals

User Orlando Colamatteo
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25 votes
25 votes

Answer: 214800

Step-by-step explanation:

The number of units that should be produced in January, 2013 in order for the company to meet its goals will be:

= Budgeted sales + Ending inventory - Beginning inventory

= 204000 + (240000 × 30%) - 61200

= 204000 + 72000 - 61200

= 214800

Therefore, 214800 units should be produced.

User Kedves Hunor
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