Modesto Company produces and sells Product AlphaB. company requires that 20% of the next month's sales be on hand at the end of each month.
Budgeted sales of Product AlphaB over the next four months are: $$\begin{array} { | l | l | l | l | l | }
\hline & \text { June } & \text { July } & \text { August } & \text { September } \
\hline \begin{array} { l }
\text { Budgeted sales in } \
\text { units }
\end{array} & 30,000 & 40,000 & 60,000 & 50,000 \
\hline
\end{array}$$ Budgeted production units for August will be:

Question

Modesto Company produces and sells Product AlphaB. company requires that 20% of the next month's sales be on hand at the end of each month.
Budgeted sales of Product AlphaB over the next four months are: $$\begin{array} { | l | l | l | l | l | } 
\hline & \text { June } & \text { July } & \text { August } & \text { September } \
\hline \begin{array} { l } 
\text { Budgeted sales in } \
\text { units }
\end{array} & 30,000 & 40,000 & 60,000 & 50,000 \
\hline
\end{array}$$ Budgeted production units for August will be:

Quizplus · Accepted Answer

The correct answer is A.The company requires that 20% of the next month's sales be on hand at the end of each month. So, the ending inventory for July is 0.20 * 40,000 = 8,000 units. The ending inventory for August is 0.20 * 60,000 = 12,000 units. The production for August is the sum of the budgeted sales for August and the ending inventory for August, which is 60,000 + 12,000 = 58,000 units.

Modesto Company Produces and Sells Product AlphaB Budgeted Production Units for August Will Be: A)58,000

Modesto Company Produces and Sells Product AlphaB Budgeted Production Units for August Will Be:
A)58,000