Roberts Enterprises has budgeted sales in units for the next five months as foll

Question

Roberts Enterprises has budgeted sales in units for the next five months as follows: 4,500 units 7,100 units June July August5,300 units September 6,700 units October3,700 units Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 410 units. The company needs to prepare a production budget for the second quarter of the year. The beginning inventory in units for September is: Multiple Choice 370 units

Explanation / Answer

Ending inventory = 10% of next month's sales in units.

Ending inventory in August = Beginning inventory in September.

Beginning inventory in September = 6,700 * 10% = 670 units.

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