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A company budgeted unit sales of 124000 units for January, 2017 and 140000 units for February...

A company budgeted unit sales of 124000 units for January, 2017 and 140000 units for February 2017. The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month's budgeted unit sales. If there were 37200 units of inventory on hand on December 31, 2016, how many units should be produced in January, 2017 in order for the company to meet its goals?

128800 units
166000 units
124000 units
119200 units
Business   Accounting   
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Answer #1
Production Budget For January
Sales unit 124,000
Ending inventory of finished goods (140,000 x 30%) 42,000
Total finished goods inventory needed                                              166,000
Beginning inventory of finished goods -37,200
Production Units 128,800

Production in January = 128,800 units

First option is correct.

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