Cardinal Company has finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months are: January, 200,000 units; February, 180,000 units; March, 210,000 units; and April, 230,000 units. Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following month's sales.
-The budgeted units of inventory for March 31

Question

Cardinal Company has finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months are: January, 200,000 units; February, 180,000 units; March, 210,000 units; and April, 230,000 units. Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following month's sales.​
-The budgeted units of inventory for March 31

Quizplus · Accepted Answer

The budgeted units of inventory for March 31 would be 46,000 units. This is because Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following month's sales. April's sales are projected to be 230,000 units, so the desired ending finished goods inventory for March 31 would be 20% of 230,000 units, or 46,000 units.

Cardinal Company Has Finished Goods Inventory of 55,000 Units on January