Question

Sales of Scifi Corp are expected to be 6,000 units for the month. The company would like to maintain 15% of unit sales for each month ending inventory. Beginning inventory is 1,200 units. How many units should the company produce for the upcoming month?

Answer 1

Answer:

Sales of scifi corp. are expected to be 6.00 pesos units for the month. the company would like to maintain ... for the month. the company would like to maintain 15% of unit sales for each month in ending inventory. Beginning of 1200 units. How many units should the company produce for the coming month

Explanation:

Answer 2

Concept:

Calculation of units produced-

This amount can be calculated using the following data:

• Beginning inventory total valuation This information appears on the balance sheet for the previous accounting period.
• Total ending inventory valuation. This data is shown on the balance sheet of the accounting period for which production is measured.
• The cost of the goods sold. The cost of goods sold appears on the income statement for the fiscal period in which production is measured.

The inventory produced is calculated as follows:

Inventory produced = (Ending inventory - Beginning inventory) + Cost of goods sold

Given:

• Sales= 6000 units
• Closing inventory = 15% of unit sales
• Opening Inventory = 1200 units

Find:

Units to be produced?

Solution:

Units to be kept as closing inventory = 6000 x 15%

Units to be kept as closing inventory = 900

Units to be produced = Sales - opening inventory + Closing Inventory

Units to be produced = 6000-1200+900

Units to be produced = 5700

Note-Since, COGS is not given we have assumed Sales as COGS.

Hence, the units to be produced are 5700 units.

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