Question

Production and sales estimates for March for Robin Co. are as follows:

Estimated inventory (units), March 1	17,000
Desired inventory (units), March 31	19,200
Expected sales volume (units):
Area M	6,400
Area L	8,500
Area O	7,400
Unit sales price	$16

The number of units expected to be manufactured in March is

a.24,500

b.41,500

c.22,300

d.58,500

Answer 1

Answer : a. 24,500

Explanation:

The number of units expected to be manufactured in March must equal the total number of units sold in all Areas (6,400 + 8,500 + 7,400), added to the difference between the desired inventory at the end of the month (19,200 units) and the estimated inventory at the beginning of the month (17,000 units).

The expected number of units is:

= 6,400 + 8,500 + 7,400 + (19,200 - 17,000)

= 24,500 units

The number of units expected to be manufactured in March is 24,500 units.