Markham Corporation has experienced a number of out-of-stock situations with respect to its finished-goods inventories. Inventory at the end of May, for example, was only 50 units-an all-time low.
Management desires to implement a policy whereby finished-goods inventory is 70% of the following month's sales. Budgeted sales for June, July, and August are expected to be 5,000 units, 5,600 units, and 5,500 units, respectively.
Required:
Determine the number of units that Markham must produce in June and July.

Question

Markham Corporation has experienced a number of out-of-stock situations with respect to its finished-goods inventories. Inventory at the end of May, for example, was only 50 units-an all-time low.
Management desires to implement a policy whereby finished-goods inventory is 70% of the following month's sales. Budgeted sales for June, July, and August are expected to be 5,000 units, 5,600 units, and 5,500 units, respectively.
Required: 
Determine the number of units that Markham must produce in June and July.

Quizplus · Accepted Answer

The Answer of Markham Corporation has experienced a number of out-of-stock situations with respect to its finished-goods inventories. Inventory at the end of May, for example, was only 50 units-an all-time low.
Management desires to implement a policy whereby finished-goods inventory is 70% of the following month's sales. Budgeted sales for June, July, and August are expected to be 5,000 units, 5,600 units, and 5,500 units, respectively.
Required: 
Determine the number of units that Markham must produce in June and July.

Markham Corporation Has Experienced a Number of Out-Of-Stock Situations with Respect