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28 December, 09:09

1. A company expects to sell 400 units of Product X in January and then expects sales to increase by 10% per month. If Product X sells for $10 each, the total sales for the first quarter of the year will be $

2. A manufacturing company expects to sell 12,000 units in August and 15,000 units in September. The company desires to have an ending inventory of 80% of the next month's sales. If inventory on August 1 is 8,000 units, then the company should produce units in August.

3. A manufacturer requires an ending inventory of 5,000 units. Their budgeted unit sales are 20,000 units and beginning finished goods inventor is 3,000 units. The units to be produced is

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Answers (2)
  1. 28 December, 10:15
    0
    1. Sales = $13,240

    2. 13,600 units

    3. 22,000 units

    Explanation:

    1. The sales are increasing by 10% every month. So,

    January Sales in units = 400 February Sales in units = 400 * 1.1 = 440 March Sales in units = 440 * 1.1 = 484

    January Sales = 400 * $10 ⇒ $4000 February Sales = 440 * $10 ⇒ $4400 March Sales = 484 * $10 = 4840 Total Quarter Sales = 4000 + 4400 + 4840 = $13240

    2. The closing inventory for July or opening Inventory for August should have been 80% of August sales,

    12000 * 0.8 = 9600 units Shortfall in Opening Inventory = 9600 - 8000 = 1600 units

    The ending inventory for the August should be equal to 80% of September Sales, So

    15000 * 0.8 = 12000 units So, August production should be = 1600 + 12000 = 13600 units

    3. Let the Units to be Produced be x,

    Sales = Opening Inventory + Production - Closing Inventory

    20000 = 3000 + x - 5000

    20000 + 5000 = 3000 + x

    25000 - 3000 = x

    22000 = x
  2. 28 December, 11:06
    0
    1. $13,240

    2. 16,000 units

    3. 22,000 units.

    Explanation:

    The question is answered as follows

    Part 1: Determine the total sales for the first quarter as follows

    January Sales in Units = 400 Units

    February Sales Units = 400 x 110% or 1.1 = 440 units

    March Sales Unites = 440 x 110% or 1.1. = 484 units

    Total Sales = 1,324 x $10 = $13, 240

    Part 2: Determine Production In August

    Production in August making use of the relevant figures

    = Expected units + (Expected units in september x 80%) - Inventory on August 1

    = 12,000 + (0.8 x 15,000) - 8000 = 16,000 Units

    Part 3: Determine the Production Units as follows

    Sales Units + Closing Inventory of finished goods - The Opening Inventory of finished goods

    = 20,000 units + 5,000 units - 3000 units = 22,000 units
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