Chapter 2: 9BP (page 114)

Vitale Hair Spray had sales of 13,000 units in March. A 70 percent increase is expected in April. The company will maintain 30 percent of expected unit sales for April in ending inventory. Beginning inventory for April was 650 units. How many units should the company produce in April?

Short Answer

Expert verified

The number of units should be produced by the company for April is 28,080.

Step by step solution

Increment in sales unit

$\begin{array}{rcl} Increment in sales unit & = & Sales unit of March \times Increment percentage \\ = & 13, 000 \times 70 % \\ = & 9, 100 \end{array}$

Expected sales units of april

$\begin{array}{rcl} Expected sales unit & = & Sales unit of march + Increased unit \\ = & 13, 000 + 9, 100 \\ = & 22, 100 \end{array}$

Year ending inventory of april

$\begin{array}{rcl} Year ending inventory & = & Expected sales units of april \times Percentage of ending inventory \\ = & 22, 100 \times 30 % \\ = & 6, 630 \end{array}$

Number of units to be produced

$\begin{array}{rcl} Number of units produced & = & Sales units + Ending inventory - Opening units \\ = & 22, 100 + 6, 630 - 650 \\ = & 28, 080 \end{array}$

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	20X1	20X2
Sales	\(8,000,000	\)10,000,000
Cost of goods sold	6,000,000	9,000,000
Inventory	800,000	1,000,000

Vitale Hair Spray had sales of 13,000 units in March. A 70 percent increase is expected in April. The company will maintain 30 percent of expected unit sales for April in ending inventory. Beginning inventory for April was 650 units. How many units should the company produce in April?

Short Answer

Step by step solution

Increment in sales unit

Expected sales units of april

Year ending inventory of april

Number of units to be produced

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