DigiSnaps plans to produce 65 000 units per month during 2014. Sales are projected at 55 000 for January and will increase 5% per month thereafter. There are 2000 units on hand at 1 January 2014. How many units will be on hand at 28 February 2014?

Question

Quizplus · Accepted Answer

In January, sales are 55,000 units. In February, sales increase by 5%, so February sales are 55,000 * 1.05 = 57,750 units. Production is 65,000 units per month. Starting inventory is 2,000 units. Inventory at the end of February = Starting inventory + January production - January sales + February production - February sales = 2,000 + 65,000 - 55,000 + 65,000 - 57,750 = 19,250 units.

DigiSnaps Plans to Produce 65 000 Units Per Month During