Question

XYZ Co. has forecasted June sales of 400 units and July sales of 1,400 units. The company maintains ending inventory equal to 125% of next month's sales. June beginning inventory reflects this policy. What is June's required production

Answer 1

1650 units

Step-by-step explanation:

Forecasted sales for June 400

Ending inventory for previous month = 400*1.25 = $500

Opening inventory = 500

June sales = 400

Outstanding = 500-400 =100

Closing inventory for June = 1400 *125% = 1750

Required production unit = 1750-100

=1650 units