Crystal Telecom has budgeted the sales of its innovative mobile phone over the n

Question

Crystal Telecom has budgeted the sales of its innovative mobile phone over the next four months as follows:

July 30,000
August 45,000
September 60,000
October 50,000

The company is now in the process of preparing a production budget for the third quarter. Past experience has shown that end-of-month inventories of finished goods must equal 10% of the next month’s sales. The inventory at the end of June was 3,000 units.

How many units should be produced for the month of July?

1)
30,000
2)
34,500
3)
31,500
4)
45,000
please show work

Explanation / Answer

31500 units

sales -last monts+next month

Sales Finished Next month Total production june Required July 30000 3000(last month) 4500*10%=4500 units

31500 units

sales -last monts+next month

Aug 45000 Sept 60000 Oct 50000

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