Ben Company has the following sales forecast for the next quarter: April, 20,000 units; May, 24,000 units; June, 28,000 units.Sales totaled 16,000 units in March.The March finished goods inventory was 4,000 units.End-of-month finished goods inventory levels are planned to be equal to 20 percent of the next month's planned sales.
-The planned ending inventory of finished goods for May is
A) 5,600 units.
B) 4,000 units.
C) 5,000 units.
D) 3,200 units.

Question

Ben Company has the following sales forecast for the next quarter: April, 20,000 units; May, 24,000 units; June, 28,000 units.Sales totaled 16,000 units in March.The March finished goods inventory was 4,000 units.End-of-month finished goods inventory levels are planned to be equal to 20 percent of the next month's planned sales. 
-The planned ending inventory of finished goods for May is
A) 5,600 units.
B) 4,000 units.
C) 5,000 units.
D) 3,200 units.

Quizplus · Accepted Answer

The planned ending inventory for May should be 20% of June's planned sales, which is 20% of 28,000 units, equaling 5,600 units.

Ben Company Has the Following Sales Forecast for the Next