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 February 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 February are:

Quizplus · Accepted Answer

To calculate the budgeted production units for February, we need to consider the sales forecast and the desired ending inventory. The desired ending inventory for February is 10% of March's sales, which is 500 units (10% of 5,000). The beginning inventory for February is the ending inventory of January, which is 420 units (10% of February's sales, 4,200). Therefore, the production for February is calculated as: February sales (4,200) + desired ending inventory (500) - beginning inventory (420) = 4,280 units.

Aloan Co Provides the Following Sales Forecast for the Next Three