Question

Braker Manufacturing has a target of carrying closing monthly inventory equal to fifteen percent of next month's projected sales. If the current month's beginning inventory is 8,000 units and it expects to sell 50,000 units this month and 45,000 units next month, how many units should it produce this month?

Answer 1

48,750 units

Step-by-step explanation:

The computation of the number of units produces in this month is shown below:

As we know that

Opening stock + Production - Sales = Closing stock

where,

Opening stock = 8,000 units

Sales = 50,000 units

Closing stock = 45,000 units × 15% = 6,750 units

So, the number of units produced is

6,750 units = 8,000 units + production - 50,000 units

6,750 units = - 42,000 units + production

So, production is 48,750 units