What is the ending inventory level for April in the production plan shown in the table? All entries in the table are in terms of sales units. $$\begin{array} { | l | c | c | c | c | }
\hline { \text { Month } } & \text { Forecast } & \begin{array} { c }
\text { Regular } \
\text { Production }
\end{array} & \begin{array} { c }
\text { Overtime } \
\text { Production }
\end{array} & \begin{array} { c }
\text { Ending } \
\text { Inventory }
\end{array} \
\hline \text { Tanuary } & 250 & 250 & 0 & 0 \
\hline \text { February } & 200 & 300 & 0 & \
\hline \text { March } & 300 & 325 & 25 & \
\hline \text { April } & 500 & 400 & 25 & \
\hline
\end{array}$$
A)150 units
B)125 units
C)100 units
D)75 units

Question

What is the ending inventory level for April in the production plan shown in the table? All entries in the table are in terms of sales units. $$\begin{array} { | l | c | c | c | c | } 
\hline { \text { Month } } & \text { Forecast } & \begin{array} { c } 
\text { Regular } \
\text { Production }
\end{array} & \begin{array} { c } 
\text { Overtime } \
\text { Production }
\end{array} & \begin{array} { c } 
\text { Ending } \
\text { Inventory }
\end{array} \
\hline \text { Tanuary } & 250 & 250 & 0 & 0 \
\hline \text { February } & 200 & 300 & 0 & \
\hline \text { March } & 300 & 325 & 25 & \
\hline \text { April } & 500 & 400 & 25 & \
\hline
\end{array}$$
A)150 units
B)125 units
C)100 units
D)75 units

Quizplus · Accepted Answer

To calculate the ending inventory level for April, we need to find the difference between the total production (regular + overtime) in April and the forecasted sales for April.

Total production in April = 400 (regular) + 25 (overtime) = 425

Forecasted sales for April = 500

Ending inventory level = Total production in April - Forecasted sales for April
= 425 - 500
= -75

A negative ending inventory level means that the company will not have enough inventory to meet the demand for April. To meet the demand, the company will have to produce additional units in April, which is not mentioned in the given production plan. Therefore, the best answer is D) 75 units, which represents the shortfall in inventory.

What Is the Ending Inventory Level for April in the Production