Aloan Co. provides the following sales forecast for the next three months: Sales units
$$\begin{array} { r r r }
\text { January } & \text { February } & \text { March } \
3.000 & 4,200 & 5,000
\end{array}$$ The company wants to end each month with ending finished goods inventory equal to 10% of the next month's sales. Finished goods inventory on December 31 is 300 units.
- The budgeted production units for January are:

Question

Aloan Co. provides the following sales forecast for the next three months: Sales units
 $$\begin{array} { r r r } 
\text { January } & \text { February } & \text { March } \
3.000 & 4,200 & 5,000
\end{array}$$ The company wants to end each month with ending finished goods inventory equal to 10% of the next month's sales. Finished goods inventory on December 31 is 300 units.
- The budgeted production units for January are:

Quizplus · Accepted Answer

To calculate the budgeted production units for January, we need to consider the sales forecast and the desired ending inventory. January's sales are 3,000 units, and the desired ending inventory for January is 10% of February's sales, which is 420 units (10% of 4,200). Starting inventory is 300 units. Therefore, the production needed is: 3,000 (sales) + 420 (desired ending inventory) - 300 (beginning inventory) = 3,120 units.

Aloan Co Provides the Following Sales Forecast for the Next Three