Dido Co.’s finished goods inventory policy is to hold enough inventory at the end of the...

Dido Co.’s finished goods inventory policy is to hold enough inventory at the end of the month to meet 22% of next month’s sales requirements. The cost and selling price of each unit of inventory is $19 and $29, respectively.

Dido’s budgeted sales (in units) for the months June through September 20x1 is as follows:

	June	7510
	July	5064
	August	9826
	September	2192

What is Dido’s budgeted production (in dollars) for the month of August 20x1?

Select one:

a. $8147

b. $195857

c. $154784

d. $236249

Solutions

Expert Solution

	Correct option is: c. $154,784

	Workings:
			August
	Budgeted Sales in units	=	9826
Add:	Desired ending Inventory (2192 X 22%)	=	482
	Total Production required	=	10,308
Less:	Beginning Inventory (9826 X 22%)	=	2,162
	Units to be produced	=	8,147
	Cost per unit	=	$ 19
	Budgeted production (8147 X $19)	=	$ 1,54,784

ekkarill92 answered 1 year ago

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