Denver Corporation has the following sales forecast for the next quarter: July, 4,000 units; August, 4,800 units; September, 5,600 units
Sales totaled 3,200 units in June.The June ending finished goods inventory was 800 units.End-of-month finished goods inventory levels are planned to be equal to 30 percent of the next month's planned sales.
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The planned ending inventory of finished goods for August is
A) 1,200 units.
B) 1,680 units.
C) 1,460 units.
D) 3,200 units.

Question

Quizplus · Accepted Answer

To calculate the planned ending inventory of finished goods for August, we need to first find out the total units needed for sales and ending inventory in August:

Total Units Needed = Planned Sales in August + Ending Inventory in August

Planned Sales in August = 4,800 units (given in the sales forecast)

Ending Inventory in August = 30% of Planned Sales in September = 30% of 5,600 units = 1,680 units

Therefore, the planned ending inventory of finished goods for August is 1,680 units.

Denver Corporation Has the Following Sales Forecast for the Next