Question

Corporation plans to sell 26,000 units during August. If the company has 9,500 units on hand at the start of the month, and plans to have 10,500 units on hand at the end of the month, how many units must be produced during the month

Answer 1

Production = 27000 units

Step-by-step explanation:

The number of units that must be produced during the month should be enough to meet the selling requirement for the month plus the desired level of ending inventory. Any starting of beginning inventory at the start of the month will reduce the number of units to be produced. Thus, the formula to calculate production for the month is,

Sales = Opening inventory + Production - Closing Inventory

26000 = 9500 + Production - 10500

26000 + 10500 - 9500 = Production

Production = 27000 units