Mr Lewis's Co has projected sales for the next four months as follows: $$\begin{array} { l c }
& \underline { \text { Units } } \
\text { January } & 70,000 \
\text { February } & 90,000 \
\text { March } & 55,000 \
\text { April } & 65,000
\end{array}$$ Beginning inventory for the year is 47,000 units. Ending inventory for each month should be 30% of the next month's sales. How many units should the company produce in February?
A) 59,500
B) 97,000
C) 79,500
D) 90, 000

Question

Mr Lewis's Co has projected sales for the next four months as follows: $$\begin{array} { l c } 
& \underline { \text { Units } } \
\text { January } & 70,000 \
\text { February } & 90,000 \
\text { March } & 55,000 \
\text { April } & 65,000
\end{array}$$ Beginning inventory for the year is 47,000 units. Ending inventory for each month should be 30% of the next month's sales. How many units should the company produce in February?
A) 59,500
B) 97,000
C) 79,500
D) 90, 000

Quizplus · Accepted Answer

To calculate February's production, use the formula: Production = Sales + Ending Inventory - Beginning Inventory. February's ending inventory should be 30% of March's sales (0.3 * 55,000 = 16,500). February's beginning inventory is January's ending inventory, which is 30% of February's sales (0.3 * 90,000 = 27,000). So, Production = 90,000 + 16,500 - 27,000 = 79,500 units.

Mr Lewis's Co Has Projected Sales for the Next Four