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21 December, 16:19

The company has 5,000 units of product on hand at July 1. 10% of the next month's sales in units should be on hand at the end of each month. October sales are expected to be 76,500 units. Budgeted sales for September would be (in units) :

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  1. 21 December, 16:31
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    September sales units = 60,000

    Explanation:

    From the question stated we will work on the production budget in reverse and the August data to find the solution

    Recall that,

    July : sales in units = 45,000, Production in units = 45,700

    August: sales in units = 57,000, Production in units = 57,300

    September: sales in units = unknown, Production in units = 61,650

    Then,

    August budget unit = 57,300

    The Beginning inventory = 5,700 (10% of 57,000)

    The Units required in August = 63,000

    The sales in July units = 57,000

    The desired ending inventory = 10% of September's sales unit

    September sales units = 60,000

    Now

    September sales units = 60,000

    Desired ending inventory = 7,650

    Units required = 67,650

    Beginning inventory = (6,000)

    Therefore,

    September production units is given as = 61,650
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