Company expects to sell 1 comma 500 units of finished product in January and 1 comma 750 units in February. The company has 180 units on hand on January 1 and desires to have an ending inventory equal to 80 % of the next month's sales. March sales are expected to be 1 comma 820 units. Prepare Bailey 's production budget for January and February.

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28 January, 12:52

Company expects to sell 1 comma 500 units of finished product in January and 1 comma 750 units in February. The company has 180 units on hand on January 1 and desires to have an ending inventory equal to 80 % of the next month's sales. March sales are expected to be 1 comma 820 units. Prepare Bailey 's production budget for January and February.

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Oliver Bright · Answer 1

2720 units; 1806 units

Explanation:

Ending Inventory in February = 80% x 1820 = 1456 units

Ending Inventory in January = 80% x 1750 = 1400 units

Budgeted production in January = Budgeted sales in Jan + Ending Inventory in Jan - Begining Inventory in Jan = 1500 + 1400 - 180 = 2720 units

Budgeted production in February = Budgeted sales in Feb + Ending inventory in Feb - Begining Inventory in Feb = 1750 + 1456 - 1400 = 1806 units