Total number of units to be produced
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Question 5: (2 points)
Harden, Inc., has budgeted sales in units for the next five months as follows:
June 7,100 units
July 4,800 units
August 6,600 units
September 7,600 units
October 4,000 units
Past experience has shown that the ending inventory for each month should be equal to 14% of the next month's sales in units. The inventory on May 31 contained 1,250 units. The company needs to prepare a production budget for the next five months.
The total number of units produced in July should be:
5,000 units
5,052 units
4,800 units
4,622 units
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The solution explains how to calculate the total number of units to be produced
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Units to be produced = Sales + ending inventory - beginning ...
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