Samuelson has a beginning inventory balance on January 1 of 12,000 units and desires an ending balance of 20% of the next month's sales. If sales are expected to be 17,000 for January and 20,000 for February, what amount of units does Samuelson have to produce during the month of January?
A) 4,000 units
B) 9,000 units
C) 3,400 units
D) 8,400 units

Question

Quizplus · Accepted Answer

Beginning Inv. + Production − Sales = Ending Inventory
12,000 + Production − 17,000 = (20,000 × 0.2)
Production = 5,000 + 4,000
Production = 9,000

Samuelson Has a Beginning Inventory Balance on January 1 of 12,000