Question

Aloan Co. provides the following sales forecast for the next three months:Sales units: January: 3,000 February: 4,200 March: 5,000The compnay wants to end each month with the ending finished goods invetory equal to 10% of the next month's sales. Finished goods inventory on December 31 is 300 units. The budgeted production units for February are?

Answer 1

The budgeted production units for February are 4,400.

Step-by-step explanation:

Prepare a Production Budget for February as follows :

units

Budgeted Sales 4,200

Add Budgeted Closing Stock (5,000 × 10%) 500

Total Production Needed 4,700

Less Budgeted Opening Stock (3,000 × 10%) (300)

Budgeted Production 4,400