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16 April, 03:27

ABC Company's budgeted sales for June, July, and August are 14,800, 18,800, and 16,800 units, respectively. ABC requires 30% of the next month's budgeted unit sales as finished goods inventory each month. Budgeted ending finished goods inventory for May is 4,440 units.

Required: Calculate the number of units to be produced in June and July.

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  1. 16 April, 06:48
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    The number of units to be produced in June and July is 16,000 units and $18,200 respectively

    Explanation:

    The computations are shown below:

    Number of units produced in June

    = Sale units + ending inventory units - beginning inventory units

    where,

    Sale units is 14,800 units

    Ending inventory units = 18,800 units * 30% = 5,640 units

    Beginning inventory units = 4,440 units

    Now put these units to the above formula

    So, the units would equal to

    = 14,800 units + 5,640 units - 4,440 units

    = 16,000 units

    Number of units produced in June

    = Sale units + ending inventory units - beginning inventory units

    where,

    Sale units is 18,800

    Ending inventory units = 16,800 units * 30% = 5,040 units

    Beginning inventory units = 18,800 units * 30% = 5,640 units

    Now put these units to the above formula

    So, the units would equal to

    = 18,800 units + 5,040 units - 5,640 units

    = 18,200 units
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