Question

Trevor Company expects sales of Product W to be 64,000 units in April, 79,000 units in May, and 74,000 units in June. The company desires that the inventory on hand at the end of each month be equal to 40% of the next month's expected unit sales. Due to excessive production during March, on March 31 there were 29,000 units of Product W in the ending inventory. Given this information, Trevor Company's production of Product W for the month of April should be:

Answer 1

66,600 units

Step-by-step explanation:

Sales for April = 64,000 units

Closing Inventory Required at end of April = 31,600 units (79,000*40%)

Units Required = 64,000 units + 31,600 units

Units Required = 95,600 units

Units Need to be produced = Units Required - Units Available now

Units Need to be produced = 95,600 units - 29,000 units

Units Need to be produced = 66,600 units

So, trevor Company's production of Product W for the month of April should be 66,600 units.