Jannusch Corporation makes one product. Budgeted unit sales for July, August, September, and October are 10,000, 11,600, 13,300, and 12,700 units, respectively. The ending finished goods inventory should equal 20% of the following month's sales. The budgeted required production for August is closest to:

Question

Quizplus · Accepted Answer

Step 1: Calculate the desired ending finished goods inventory for each month
- August: 20% of September sales = 0.20 x 13,300 = 2,660 units
- September: 20% of October sales = 0.20 x 12,700 = 2,540 units
- October: no inventory needed since it is the final month

Step 2: Calculate the total units needed for each month
- August: (10,000 + 2,660) - beginning inventory = 12,660 units
- September: (11,600 + 2,540) - 2,660 = 11,480 units
- October: (13,300 + 0) - 2,540 = 10,760 units

Step 3: Use the information to find the budgeted required production for August
- August production = August sales + desired ending inventory - beginning inventory
- August production = 11,600 + 2,660 - 0 = 14,260 units

Therefore, the closest option is B) 11,940 units.

Jannusch Corporation Makes One Product