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Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget:
October: $42000
November: $45000
December: $50400
Whistle Works sells each whistle for $12. They have a desired ending inventory for production of 20% of the next month's budgeted sales in units. How many units does Whistle Works need to produce in November?

Sagot :

Tundexi

The number of units that Whistle Works need to produce in November is 3,840 Units.

Here, we are going to calculate the number of units that Whistle Works need to produce in November.

Units for November = Total Sales / Selling Price Per Unit

Units for November = $45,000 / $12

Units for November = 3,750 Units

Units for December = Total Sales / Selling Price Per Unit

Units for December = $50,400 / $12

Units for December = 4,200 Units

Units to be Produced in November = 80% * Expected Sales in November + 20% * Expected Sales in December

Units to be Produced in November = 80 % * 3,750+ 20% * 4,200

Units to be Produced in November = 3,000 + 840

Units to be Produced in November = 3,840 Units

Therefore, the number of units that Whistle Works need to produce in November is 3,840 Units.

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