Question

The company has 5,000 units of product on hand at July 1. 10% of the next month's sales in units should be on hand at the end of each month. October sales are expected to be 76,500 units. Budgeted sales for September would be (in units):

Answer 1

September sales units = 60,000

Step-by-step explanation:

From the question stated we will work on the production budget in reverse and the August data to find the solution

Recall that,

July : sales in units = 45,000, Production in units = 45,700

August: sales in units = 57,000, Production in units = 57,300

September: sales in units = unknown, Production in units= 61,650

Then,

August budget unit = 57,300

The Beginning inventory = 5,700 (10% of 57,000)

The Units required in August =63,000

The sales in July units = 57,000

The desired ending inventory = 10% of September's sales unit

September sales units = 60,000

Now

September sales units = 60,000

Desired ending inventory = 7,650

Units required = 67,650

Beginning inventory = (6,000)

Therefore,

September production units is given as = 61,650