Wheeling Company produces and sells bikes. It expects to sell 20,000 bikes in the month of April and had 1,200 bikes in finished goods inventory at the end of March. Wheeling Company would like to complete operations in the month of April with at least 1,500 completed bikes in inventory. The bikes sell for $100 each. How many bikes would be produced in the month of April?
A)20,000 bikes
B)20,300 bikes
C)19,700 bikes
D)18,800 bikes

Question

Quizplus · Accepted Answer

To determine how many bikes should be produced in the month of April, we need to calculate the total number of bikes that should be produced to meet the desired ending inventory level.

Desired ending inventory = 1,500 bikes
Beginning inventory = 1,200 bikes
Expected sales = 20,000 bikes

Total bikes needed = Desired ending inventory + Expected sales - Beginning inventory
Total bikes needed = 1,500 + 20,000 - 1,200
Total bikes needed = 20,300

Therefore, the company should produce 20,300 bikes in the month of April to meet its sales goal and desired ending inventory level. The correct answer is B.

Wheeling Company Produces and Sells Bikes