Rose Bags Company plans to sell 8,000 bags in April and expects a growth rate in sales of 5% per month. The monthly target ending finished goods (FG) inventory (in bags) is 20% of the next month's planned sales. There are 2,000 bags in inventory on March 31. The number of budgeted units (in bags) to be produced in April is

Question

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Budgeted Units to be Produced = Budgeted Sales Volume + Target Ending FG Inventory Units F1F1F1S1?F1F1F10 Beginning FG Inventory Units. Budgeted Sales Volume is 8,000 bags + Target Ending FG Inventory Units (8,000 bags x (1 + 5%) x 20%) F1F1F1S1?F1F1F10 Beginning FG Inventory Units 2,000 bags = 7,680 bags.

Rose Bags Company Plans to Sell 8,000 Bags in April