Question

Bengal Co. provides the following unit sales forecast for the next three months: July August September Sales units 5,800 6,500 6,360 The company wants to end each month with ending finished goods inventory equal to 30% of the next month's sales. Finished goods inventory on June 30 is 1,740 units. The budgeted production units for July are:

Answer 1

Production= 6,010

Step-by-step explanation:

Giving the following information:

July August

Sales units 5,800 6,500

Finished goods inventory on June 30 is 1,740 units.

To calculate the production for July, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

Production= 5,800 + (6,500*0.3) - 1,740

Production= 6,010