Walsh Company expects sales of Product W to be 60,000 units in April, 86,000 uni
ID: 2377175 • Letter: W
Question
Walsh Company expects sales of Product W to be 60,000 units in April, 86,000 units in May and 81,000 units in June. The company desires that the inventory on hand at the end of each month be equal to 45% of the next month's expected unit sales. Due to excessive production during March, on March 31 there were 36,000 units of Product W in the ending inventory. Given this information, Walsh Company's production of Product W for the month of April should be:
Walsh Company expects sales of Product W to be 60,000 units in April, 86,000 units in May and 81,000 units in June. The company desires that the inventory on hand at the end of each month be equal to 45% of the next month's expected unit sales. Due to excessive production during March, on March 31 there were 36,000 units of Product W in the ending inventory. Given this information, Walsh Company's production of Product W for the month of April should be:
Explanation / Answer
units produced in the month of April = expected sales during april + 40 % of the sell in
may - on hand inventory at the end of march
= 60,000 +0.45*86,000 -36,000
= 62700 units (answer)
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