Use the information below to answer the following questions.
Patiomaster Products manufactures patio furniture. The estimated numbers of sets to be sold for the last three months of 2018 is: $$\begin{array} { l r }
\text { Month } & \text { Sales } \
\hline \text { October } & 10,000 \
\text { November } & 7,000 \
\text { December } & 5,000 \
\text { January } & 6,000
\end{array}$$ Finished goods inventory at the end of September is 2,000 units. Finished goods inventory is set at 30 percent of next month's sales.
-Refer to the table above. What will be the amount of total production for October 2018?

Question

Use the information below to answer the following questions.
Patiomaster Products manufactures patio furniture. The estimated numbers of sets to be sold for the last three months of 2018 is: $$\begin{array} { l r } 
\text { Month } & \text { Sales } \
\hline \text { October } & 10,000 \
\text { November } & 7,000 \
\text { December } & 5,000 \
\text { January } & 6,000
\end{array}$$ Finished goods inventory at the end of September is 2,000 units. Finished goods inventory is set at 30 percent of next month's sales.
-Refer to the table above. What will be the amount of total production for October 2018?

Quizplus · Accepted Answer

The total production for October 2018 is calculated by adding the sales forecast for October to the desired inventory at the end of October (which is 30% of November's sales forecast) and then subtracting the inventory at the end of September. So, the calculation is 10,000 + (0.30 * 7,000) - 2,000 = 10,000 + 2,100 - 2,000 = 10,100 units.

Use the Information Below to Answer the Following Questions Finished Goods Inventory at the End of September Is 2,000