Question

frolic Corporation has budgeted sales and production over the next quarter as follows: July August September Sales in units 41,500 53,500 ? Production in units 42,550 53,800 58,150 The company has 4,300 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 73,000 units. Budgeted sales for September would be (in units):

Answer 1

56,500 units

Explanation:

The computation of Budgeted sales for September is shown below:-

we assume the no. of units sold in September be ‘x’

Budgeted Production production for September = Budgeted sale for September + desired ending inventory for September – Beginning Inventory for September

58,150 = x units + (73,000 × 10%) - (x units of Sept. × 10%)

58,150 = x + 7,300 - 0.10x

58,150 - 7300 = 0.9x

50,850 = 0.9x

x = 50850 ÷ 0.9

x = 56,500 units