The sales budget of the Owens Company for each of the next three months is shown: January 40,000 units
February 50,000 units
March 30,000 units
The company's policy requires that 20% of the following month's budgeted sales units are on hand at the beginning of each period. How many units must be produced in February?
A) 40,000 units
B) 46,000 units
C) 56,000 units
D) 54,000 units

Question

Quizplus · Accepted Answer

The company's policy requires that 20% of the following month's budgeted sales units are on hand at the beginning of each period. So, the number of units that must be produced in February is 50,000 units (February's sales) + 20% of March's sales (30,000 units * 20% = 6,000 units) = 56,000 units.

The Sales Budget of the Owens Company for Each of the Next