Question

MC Qu. 75 Bengal Co. provides the following... Bengal Co. provides the following sales forecast for the next three months: July August September Sales units 5,900 6,600 6,460 The company wants to end each month with ending finished goods inventory equal to 25% of the next month's sales. Finished goods inventory on June 30 is 1,475 units. The budgeted production units for July are:

Answer 1

The budgeted production for July = 6075 units

Step-by-step explanation:

The opening inventory for July is 1475 which is 25% of the units sales for July.

The units needed to be produced in July for July sale are 5900 - 1475 = 4425 units.

Apart from this, the production plan is to produce 25% units of the budgeted sale for the next month. The budgeted sales for August are 6600. 25% of August's sales is 6600 * 0.25 = 1650 units. These 1650 units are also to be produced in July.

July's total production = 4425 + 1650 = 6075 units