Unicorn Corporation manufactures boxes.The estimated numbers of boxes sold for the first three months of the current year are as follows: Finished goods inventory at the end of December was 800 units.Ending finished goods inventory is equal to 25% of the next month's sales.Unicorn Corporation expects to sell the boxes for $5 each.April sales are projected at 4,500 boxes.How many boxes should be produced in February?

Question

Unicorn Corporation manufactures boxes.The estimated numbers of boxes sold for the first three months of the current year are as follows:  Finished goods inventory at the end of December was 800 units.Ending finished goods inventory is equal to 25% of the next month's sales.Unicorn Corporation expects to sell the boxes for $5 each.April sales are projected at 4,500 boxes.How many boxes should be produced in February?

Quizplus · Accepted Answer

Units to Be Produced = Expected Unit Sales + Units in Desired Ending Inventory (EI) - Units in Beginning Inventory (BI)
Units to Be Produced in February = 5,000 boxes + (0.25 × 4,600 boxes) - (0.25 × 5,000 boxes) = 5,000 boxes + 1,150 boxes - 1,250 boxes = 4,900 boxes

Unicorn Corporation Manufactures Boxes