Bronze Company's sales forecast for April is 12,000 units, for May is 22,000 units, and for June is 25,000 units. Sales totaled 10,000 units in March. The finished goods inventory for March was 2,000 units. End-of-month finished goods inventory levels are planned to be equal to 15 percent of the next month's planned sales. The planned ending inventory of finished goods for May is:
A)3,750 units.
B)2,470 units.
C)5,640 units.
D)6,320 units.

Question

Quizplus · Accepted Answer

The planned ending inventory of finished goods for May is calculated as 15% of June's planned sales (since it's the next month after May). June's planned sales are 25,000 units, so the planned ending inventory for May is 15% of 25,000 = 3,750 units.

Bronze Company's Sales Forecast for April Is 12,000 Units, for May