The following forecasted sales pertain to Nyak Company: $$\begin{array} { l r }
\text { Month } & \text { Sales } \
\text { April } & \$ 200,000 \
\text { May } & 250,000 \
\text { June } & 150,000 \
\text { July } & 100,000
\end{array}$$ Collection pattern: 60% in month of sale
40% in month following the sale Accounts receivable as of March 31$\quad$$\quad$$\quad$$35,000
Finished goods inventory as of March 31$\quad$$\quad$4,000 units The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20% of the next month's sales.How many units are expected to be produced in April?

Question

The following forecasted sales pertain to Nyak Company: $$\begin{array} { l r } 
\text { Month } & \text { Sales } \
\text { April } & \$ 200,000 \
\text { May } & 250,000 \
\text { June } & 150,000 \
\text { July } & 100,000
\end{array}$$ Collection pattern: 60% in month of sale
40% in month following the sale Accounts receivable as of March 31$\quad$$\quad$$\quad$$35,000
Finished goods inventory as of March 31$\quad$$\quad$4,000 units The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20% of the next month's sales.How many units are expected to be produced in April?

Quizplus · Accepted Answer

April sales require 20,000 units (200,000/10). May sales require 25,000 units (250,000/10), so April's ending inventory should be 5,000 units (20% of 25,000). Therefore, production in April should be 21,000 units (20,000 for April sales + 5,000 for ending inventory - 4,000 beginning inventory).

The Following Forecasted Sales Pertain to Nyak Company Collection Pattern: 60% in Month of Sale 40% in Month

The Following Forecasted Sales Pertain to Nyak Company Collection Pattern: 60% in Month of Sale
40% in Month