Walsh Company expects sales of Product W to be 67,000 units in April, 82,000 units in May and 77,000 units in June. The company desires that the inventory on hand at the end of each month be equal to 35% of the next month's expected unit sales. Due to excessive production during March, on March 31 there were 32,000 units of Product W in the ending inventory. Given this information, Walsh Company's production of Product W for the month of April should be:
|
82,000 units | |
62,195 units | |
63,700 units | |
67,000 units |
April | |
Budgeted unit sales | 67,000 |
Add desired ending finished goods inventory1 |
28,700
|
Total needs | 95,700 |
Less beginning finished goods inventory |
32,000
|
Required production in units |
63,700
|
1 May sales of 82,000 units × 35% = 28,700 units |
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