ABC Ltd., has budgeted sales in units for the next five months as follows: Past

Question

ABC Ltd., has budgeted sales in units for the next five months as follows:

Past experience has shown that the ending inventory for each month should be equal to 15% of the next month's sales in units. The inventory on May 31 contained 1,185 units. The company needs to prepare a production budget for the next five months.
The beginning inventory for September should be:

1,185 units

1,095 units

1,215 units

1,200 units

June    7,900 units July    7,100 units August    7,300 units September    8,100 units October    8,000 units

Explanation / Answer

september sales*15%=1,215 units

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