Question

Nearing Company has provided the following information:

Budgeted unit sales:

January	420,000
February	400,000
March	430,000
April	450,000

Nearing Company plans on maintaining ending inventory levels equal to 40% of the following month's unit sales.

Fill in the amounts for the quarter ending March 31, 2018:

You must enter your answers in the following format: x,xxx

1) Budgeted unit sales

2) Desired units of ending finished goods inventory

3) Total needs

4) Units of beginning finished goods inventory

5) Required production in units

Answer 1

1. Table showing budgeted sales in units

Month	Unit
January	420,000
February	400,000
March	430,000
Total	1,250,000

2. Desired unit if ending goods inventory =450,000*40%= 180,000 units.

3. Total needs= closing stock+ sale units

= 180,000+ 1,250,000=1,430,000 units.

4. Units in the beginning of finished goods inventory

= 420,000*40%=168,000 units.

5. Required Production in units

= Closing stock+ sales- opening stock

= 180,000+1,250,000-168,000

=1,262,000units