The firm's inventory policy is to have ending inventory equal to 10% of next month's sales.

The firm's inventory policy is to have ending inventory equal to 10% of next month's sales.
Fill in the missing numbers.

	February	March	April
Ending inventory			5,000
Beginning inventory
Budgeted sales	12,000	13,000	19,000
Budgeted production

(If you get stuck on the beginning inventory for February: it is equal to the ending inventory for January, which you can compute with the available data on February sales)

Solutions

Expert Solution

Beginning inventory+Budgeted production-Ending inventory=Budgeted sales

	February	March	April
Ending inventory	(10%13000)=1300*	(10%19000)=1900*	5000
Beginning inventory	(10%12000)=1200*	1300	1900
Budgeted sales	12000	13000	19000
Budgeted production	(12000+1300-1200)=12100	(13000+1900-1300)=13600	(19000+5000-1900)=22100

ekkarill92 answered 2 years ago

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