Answer:
Instructions are below.
Explanation:
Giving the following information:
Sales:
April= 500
May= 580
June= 540
July= 620
Finished goods inventory on April 1 is 190 units
Desired ending inventory= 25% next month sales.
To calculate the production for each month, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
April:
Sales= 500
Desire ending inventory= (580*0.25)= 145
Beginning inventory= (190)
Total production= 455 units
May:
Sales= 580
Desire ending inventory= (540*0.25)= 135
Beginning inventory= (145)
Total production= 570 units
June:
Sales= 540
Desire ending inventory= (620*0.25)= 155
Beginning inventory= (135)
Total production= 560 units
