assume a company's estimated sales for january, february and march ar 31000 units 32000 units and 30000 units, respectively. the company always maintains ending finished goods inventory equal to 15 of next month's unit sales what is the required production in units for january

The required production in units for the month of January will be 31,150 units.

Here, we are to calculate the required production in units for the month of January.

Calculation of production required in January month

Particulars                                         Units

Sales Unit on January                      31,000

Add: Desired Ending Inventory       4,800  (32,000 × 15%)

Less: Beginning Inventory              -4,650  (31,000 × 15%)

Estimated Production in January  31,150 units

Therefore, the required production in units for the month of January will be 31,150 units.

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Estimated Production in January31,150

Explanation:

The computation of the required production in units for the month of Jan is shown below:

Sales Unit on January  31,000

Add: Desired Ending Inventory  (32,000 × 15%) 4,800

Less: Beginning Inventory    (31,000 × 15%) -4,650

Estimated Production in January31,150

Hence, the required production in units for the month of Jan is 31,150 and the same is to be considered

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