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26 May, 01:33

XYZ Co. has forecasted June sales of 400 units and July sales of 1,400 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

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  1. 26 May, 05:17
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    1650 units

    Explanation:

    Forecasted sales for June 400

    Ending inventory for previous month = 400*1.25 = $500

    Opening inventory = 500

    June sales = 400

    Outstanding = 500-400 = 100

    Closing inventory for June = 1400 * 125% = 1750

    Required production unit = 1750-100

    =1650 units
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