Boxes R Us Corporation manufactures boxes.The estimated number of boxes sold for the first three months of the year is as follows: Finished goods inventory at the end of December was 900 units.Ending finished goods inventory is equal to 20% of the next month's sales.Boxes R Us 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?
$\begin{array}{ll}
\text { Month } & \text { Sales } \
\text { January } & 3,000 \
\text { February } & 4,200 \
\text { March } & 3,900
\end{array}$

Question

Quizplus · Accepted Answer

To calculate the number of boxes to be produced in February, we need to consider the sales for February and the desired ending inventory for February. The ending inventory for February should be 20% of March's sales, which is 20% of 3,900 = 780 boxes. The beginning inventory for February is the ending inventory of January, which is 20% of February's sales, or 840 boxes. Therefore, the production for February is calculated as: February sales (4,200) + ending inventory for February (780) - beginning inventory for February (840) = 4,140 boxes.

Boxes R Us Corporation Manufactures Boxes Month Sales January 3,000 February 4,200 March 3,900\begin{array}{ll}\text { Month } & \text { Sales } \\\text { January } & 3,000 \\\text { February } & 4,200 \\\text { March } & 3,900\end{array} Month January February March ​ Sales 3,0004,2003,900​

Boxes R Us Corporation Manufactures Boxes $\begin{array}{ll}\text { Month } & \text { Sales } \\\text { January } & 3,000 \\\text { February } & 4,200 \\\text { March } & 3,900\end{array}$