Question

Furniture, Inc., estimates the following number of mattress sales for the first four months of 2013:...

Furniture, Inc., estimates the following number of mattress sales for the first four months of 2013:

                                          Month                Sales  

                                          January             10,000  

                                          February           14,000  

                                          March               13,000  

                                          April                 16,000  

Finished goods inventory at the end of December is 3,000 units. Target ending finished goods inventory is 30% of the next month's sales.  

How many mattresses need to be produced in January 2013?  

8,800 mattresses   
11,200 mattresses   
13,000 mattresses   

14,200 mattresses
Business   Accounting   
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Answer #1
Answer = 11,200 mattresses

Calculation:

January month's beginning Finished goods = 3,000 units (December month's ending inventory)

January month's ending Finished goods = 30% of the February month's sale

January month's ending finished goods = 30% * 14,000 units = 4,200 units

Number of mattresses produced in January 2013

Particulars Units
Sales 10,000
Less Beginning finished goods 3,000
Add: Ending finished goods 4,200
Number of mattresses produced in January 2013 11,200

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