BoomBoom Company produces speaker systems for trucks. BoomBoom expects to sell 20,000 units in January, 25,000 units in February, and 22,000 units in March. Each unit is priced at $45. BoomBoom's desired ending inventory is 25% of the following month's sales. That requirement was met on January 1.
Each speaker system requires two boxes and 10 metres of wire. Boxes cost $5 each, and wire is $0.90 per metre. BoomBoom's desired ending raw materials inventory is 30% of the following month's production needs. On January 1, BooBoom had 9,000 boxes and 100,000 metres of wire in inventory.
-Refer to the Figure.How many units does BoomBoom expect to produce in February?

Question

Quizplus · Accepted Answer

To calculate the units BoomBoom expects to produce in February, we need to add the February sales (25,000 units) to the desired ending inventory for March (25% of March sales = 5,500 units). 
So, the total demand for February and March is 30,500 units. 
Now, we need to subtract the desired ending inventory for February, which is 25% of March sales (22,000 x 0.25 = 5,500 units). 
So, the required production for February is 25,000 + 5,500 - desired ending inventory for February (25% of 25,000 = 6,250 units) = 23,750 units.

As for the best choice(s), the question doesn't provide any options or criteria to evaluate them.

BoomBoom Company Produces Speaker Systems for Trucks