Question

Delsing Plumbing Company has beginning inventory of 16,500 units, will sell 55,000 units for the month, and desires to reduce ending inventory to 25 percent of beginning inventory. How many units should Delsing produce?

Answer 1

Answer: 42,625 units

Explanation:

Projected sales for the month = 55,000 units

Beginning inventory                    =16,500units

Desired ending inventory          = 25% of 16,500

                                                         = 0.25 × 16,500

                                                         = 4,125 units

Expected produce = projected sales + desired ending inventory - Beginning inventory

Therefore Expected production = 55,000 + 4,125 - 16,500

                                                            = 42,625 units