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

Beginning inventory for September = Ending inventory for August

Ending inventory for August = 10% x September sales

= 10% x 6,700 = 670 units

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