Harden, Inc., has budgeted sales in units for the next five months as follows: P

Question

Harden, Inc., 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 1,050 units. The company needs to prepare a production budget for the next five months.

The total number of units produced in July should be:

Multiple Choice

5,300 units

6,365 units

5,570 units

5,030 units

June 7,000 units July 5,300 units August 7,100 units September 6,800 units October 4,900 units

Explanation / Answer

Option C is correct .

Opening stock of July = 15 % * 5300 i.e. 795

Sales of july = 5300

Closing stick of july = 15 % * 7100

= 1065

Therefore production = 1065+5300-795

=5570 units

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