Walsh Company expects sales of Product W to be 75,000 units in April, 60,000 uni

Question

Walsh Company expects sales of Product W to be 75,000 units in April, 60,000 units in May and 70,000 units in June. The company desires that the inventory on hand at the end of each month be equal to 40% of the next month's expected unit sales. Due to excessive production during March, on March 31 there were 15,000 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:

Select one:

a. 64,000 units

b. 75,000 units

c. 84,000 units

d. 54,000 units

Explanation / Answer

Answer: Option C: 84,000 units.

Calculation:

april may june sales expected 75000 60000 70000 desired ending inventory 24000 28000 total units required 99000 88000 beginning inventory 15000 24000 production required 84000 64000

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