Question

Furniture, Inc., estimates the following number of mattress sales for the first four months of 2019:

Month Sales

January 32,000

February 36,800

March 29,600

April 43,200

Finished goods inventory at the end of December is 7,100 units. Target ending finished goods inventory is 20% of the next month's sales.

How many mattresses should be produced in the first quarter of 2019?

A.
99,940 mattresses

B.
67,680 mattresses

C.
67,620 mattresses

D.
108,580 mattresses

Answer 1

Answer:

The correct answer is A.

Explanation:

To calculate the production required for the first quarter, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

Production= (32,000 + 36,800 + 29,600) + (43,200*0.2) - 7,100

Production= 98,400 + 8,640 - 7,100

Production= 99,940