The following forecasted sales pertain to Micah Company: Collection pattern:
60% in month of sale
40% in month following the sale
The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20% of the next month's sales.How many units are expected to be produced in April?

Question

The following forecasted sales pertain to Micah Company: Collection pattern:
60% in month of sale
40% in month following the sale
 The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20% of the next month's sales.How many units are expected to be produced in April?

Quizplus · Accepted Answer

SUPPORTING CALCULATIONS: ($200,000 / $10) + [($250,000 / $10) × 0.20] - 4,000 = 21,000 units

The Following Forecasted Sales Pertain to Micah Company: Collection Pattern