Harden, Inc., has budgeted sales in units for the next five months as follows:
June 7,000 units
July 5,200 units
August 6,300 units
September 6,700 units
October 4,700 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:
Units to be produced = Sales + Ending Inventory - Beginning ...
The solution explains how to calculate the total number of units should be produced.