Question

Based on the following production and sales estimates for May, determine the number of units expected to be manufactured in May:

Estimated inventory (units), May 1 20,000
Desired inventory (units), May 31 15,000
Expected sales volume (units):
South region 30,000
West region 40,000
North region 20,000
Unit sales price $10

Answer 1

Production= 85,000 units

Step-by-step explanation:

Giving the following information:

Estimated inventory (units), May 1= 20,000

Desired inventory (units), May 31= 15,000

Expected sales volume (units):

South region 30,000

West region 40,000

North region 20,000

To calculate the number of units to be produced, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

Production= 90,000 + 15,000 - 20,000

Production= 85,000