Question
In: Accounting
Assume a company’s estimated sales for January, February, and March are 25,000 units, 27,000 units, and 24,000 units, respectively.
Assume a company’s estimated sales for January, February, and March are 25,000 units, 27,000 units, and 24,000 units, respectively. The company always maintains ending finished goods inventory equal to 15% of next month’s unit sales. What is the required production in units for January?
Solutions
Expert Solution
| Particulars | No. of units |
| Estimated sales for January | 25,000 |
| Add: Desired ending finished goods inventory (27,000 units x 15%) | 4,050 |
| Total requirements | 29,050 |
| Less: Beginning ending finished goods inventory (25,000 units x 15%) | 3,750 |
| Required production in units for January | 25,300 |
Required production in units for January = 25,300 units
Required production in units for January = 25,300 units
DEEPIKA GOYAL answered 2 years agoRelated Solutions
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