Douglas Corporation plans to sell 24000 units of Product A d

Douglas Corporation plans to sell 24,000 units of Product A during July and 30,000 units during August. Sales of Product A during June were 25,000 units. Past experience has shown that end-of-month inventory should equal 3,000 units plus 30% of the next month\'s sales. On June 30 this requirement was met. Based on these data, how many units of Product A must be produced during the month of July? A) 24,000 B) 28,800 C) 25,800 D) 22,200

Solution

Beginning inventory(3000+(30%*24000)) 10200 Add:production(balance)(24000+12000-10200) 25800 units. Less:ending inventory(3000+(30%*30,000)) 12000 Sales 24000