Frolic Corporation has budgeted sales and production over the next quarter as follows: The company has 17,500 units of product on hand at July 1.25% of the next month's sales in units should be on hand at the end of each month.October sales are expected to be 97,000 units.Budgeted sales for September would be (in units):

Question

Frolic Corporation has budgeted sales and production over the next quarter as follows:  The company has 17,500 units of product on hand at July 1.25% of the next month's sales in units should be on hand at the end of each month.October sales are expected to be 97,000 units.Budgeted sales for September would be (in units):

Quizplus · Accepted Answer

To determine the budgeted sales for September, we need to calculate the desired ending inventory for October:

October Ending Inventory: 0.25 x 97,000 = 24,250

We then need to adjust for the beginning inventory on July 1:

Adjusted October Ending Inventory: 24,250 - 17,500 = 6,750

The units produced during September will need to cover both the units sold in September and the desired ending inventory for October:

September Production Required: 80,000 + 6,750 = 86,750

Therefore, the budgeted sales for September would be:

September Sales = September Production Required - Beginning Inventory 
September Sales = 86,750 - 13,600 
September Sales = 73,150

So, the best choice is B. 11ea7998_5d6c_267a_911b_d705d9b62f83_TB2627_00_TB2627_00 83,000 + 0.25X - 20,750 = 84,750
0.25X = 22,500
X = 90,000
or
24,250 + X - 0.25X = 91,750
0.75X = 67,500
X = 90,000

Frolic Corporation Has Budgeted Sales and Production Over the Next