Question

In: Accounting

XYZ Co. has forecasted June sales of 600 units and July sales of 1000 units.


XYZ Co. has forecasted June sales of 600 units and July sales of 1000 units. The company maintains ending inventory equal to 125% of next month's sales. June beginning inventory reflects this policy. What is June's required production? 

Select one: 

a. 1,100 units b. 0-units c. 500 units d. 400 units 

Solutions

Expert Solution

Question 1

Option A is correct, i.e. 1,100 units

Opening inventory of June = 600 * 125% = 750

Closing inventory of June = 1,000 * 125% = 1,250

Production of June = Sales for the month of June + Closing inventory of June - Opening inventory of June

= 600 + 1,250 - 750

= 1,100 units

ekkarill92 answered 2 years ago
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