WellWheats, Inc. produces breakfast cereal and sells each box, or unit, for $7. The company is projecting sales of 1,000 units for the month of March. There are 30 units in the beginning inventory. Each unit requires 20 ounces of raw materials and 0.20 direct labor hours to make. The company's policy is to keep ending finished goods inventory of 10% of the current month's sales. Selling and administrative expenses for the month have been budgeted at $2,000. How many units should WellWheats produce in March?

Question

Dale Watts

Business

19 November, 12:30

WellWheats, Inc. produces breakfast cereal and sells each box, or unit, for $7. The company is projecting sales of 1,000 units for the month of March. There are 30 units in the beginning inventory. Each unit requires 20 ounces of raw materials and 0.20 direct labor hours to make. The company's policy is to keep ending finished goods inventory of 10% of the current month's sales. Selling and administrative expenses for the month have been budgeted at $2,000. How many units should WellWheats produce in March?

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Answers (1)

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Natalia Mckenzie · Answer 1

Production for March = 1,070 units

Explanation:

Giving the following information:

The company is projecting sales of 1,000 units for March. There are 30 units in the beginning inventory. The company's policy is to keep ending finished goods inventory of 10% of the current month's sales

Sales = 1,000 units

Ending inventory = 100 units

Beginning inventory = 30 units (-)

Production for March = 1,070 units