Walsh Company expects sales of Product W to be 60,000 units in April, 84,000 uni

Question

Walsh Company expects sales of Product W to be 60,000 units in April, 84,000 units in May and 79,000 units in June. The company desires that the inventory on hand at the end of each month be equal to 45% of the next month's expected unit sales. Due to excessive production during March, on March 31 there were 34,000 units of Product W in the ending inventory. Given this information, Walsh Company's production of Product W for the month of April should be:

84,000 units
60,000 units
63,800 units
81,810 units

Explanation / Answer

production = 60000 + 0.45 * 84000 - 34000 = 63800 units

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