Abc company’s budgeted sales for june, july, and august are 14,800, 18,800, and 16,800 units, respectively. abc requires 30% of the next month’s budgeted unit sales as finished goods inventory each month. budgeted ending finished goods inventory for may is 4,440 units.

required: calculate the number of units to be produced in june and july.

The number of units to be produced in June and July is 16,000 units and $18,200 respectively

Explanation:

The computations are shown below:

Number of units produced in June

= Sale units + ending inventory units - beginning inventory units

where,  

Sale units is  14,800 units

Ending inventory units = 18,800 units × 30% = 5,640 units

Beginning inventory units = 4,440 units

Now put these units to the above formula  

So, the units would equal to  

= 14,800 units + 5,640 units - 4,440 units

= 16,000 units

Number of units produced in June

= Sale units + ending inventory units - beginning inventory units

where,  

Sale units is  18,800

Ending inventory units = 16,800 units × 30% = 5,040 units

Beginning inventory units = 18,800 units × 30% = 5,640 units

Now put these units to the above formula  

So, the units would equal to  

= 18,800 units + 5,040 units - 5,640 units

= 18,200 units

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