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

  1. 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 the first quarter (January, February, March) of 2013?
    37,000 mattresses
    38,800 mattresses
    41,800 mattresses

    44,800 mattresses
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Answer #1
January February   March   Quarter
Estimated sales 10000 14000 13000
Add: Target ending finished goods inventory 4200 3900 4800
Total units needed 14200 17900 17800
Less: Beginning finished goods inventory 3000 4200 3900
Units to be produced 11200 13700 13900 38800
Option B 38,800 mattresses is correct
Workings:
Target ending finished goods inventory:
January 4200 =14000*30%
February   3900 =13000*30%
March   4800 =16000*30%
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