Kaufman Industries has just completed its sales forecasts and its marketing depa
ID: 2768148 • Letter: K
Question
Kaufman Industries has just completed its sales forecasts and its marketing department estimates that the company will sell 44,400 units during the upcoming year. In the past, management has maintained inventories of finished goods at approximately 3 months' sales. However, the estimated inventory at the start of the year of the budget period is only 13,000 units. Sales occur evenly throughout the year. What is the estimated production level (units) for the first month of the upcoming budget year?
Explanation / Answer
Answer: 44,400/12 = 3,700 sales per month;
3,700 + (3 x 3,700) - 13,000 = 1800 units
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