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Chapter 2: 8BP (page 114)

Sales for Ross Pro’s Sports Equipment are expected to be 4,800 units for the coming month. The company likes to maintain 10 percent of unit sales for each month in ending inventory. Beginning inventory is 300 units. How many units should the firm produce for the coming month?

Short Answer

Expert verified

The number of units that should be produced by the company for the coming months is 4,980.

Step by step solution

01

Year ending inventory

Yearendinginventory=Expectedsalesunits×Percentageofendinginventory=4,800×10%=480

02

Number of units to be produced

Numberofunitsproduced=Salesunits+Endinginventory-Openingunits=4,800+480-300=4,980

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