Barley Enterprises has budgeted unit sales for the next four months as follows:
$\begin{array} { |l | r | }
\hline \text { October } & 4,800 \text { units } \
\hline \text { November } & 5,800 \text { units } \
\hline \text { December } & 6,400 \text { units } \
\hline \text { January } & 5,200 \text { units } \
\hline
\end{array}$The ending inventory for each month should be equal to 15% of the next month's sales in units. The inventory on September 30 was below this level and contained only 600 units.

-What are the total units to be produced in October?

Question

Barley Enterprises has budgeted unit sales for the next four months as follows:
$\begin{array} { |l | r | } 
\hline \text { October } & 4,800 \text { units } \
\hline \text { November } & 5,800 \text { units } \
\hline \text { December } & 6,400 \text { units } \
\hline \text { January } & 5,200 \text { units } \
\hline
\end{array}$The ending inventory for each month should be equal to 15% of the next month's sales in units. The inventory on September 30 was below this level and contained only 600 units.

-What are the total units to be produced in October?

Quizplus · Accepted Answer

To calculate the total units to be produced in October, we first determine the desired ending inventory for October, which should be 15% of November's sales (5,800 units). So, 15% of 5,800 = 870 units. The beginning inventory for October is the ending inventory of September, which is 600 units. The formula to calculate the total units to be produced is: (Budgeted sales + Desired ending inventory) - Beginning inventory. For October, this is (4,800 + 870) - 600 = 5,070 units.

Barley Enterprises Has Budgeted Unit Sales for the Next Four