Denver Corporation has the following sales forecast for the next quarter: July, 4,000 units; August, 4,800 units; September, 5,600 units
Sales totaled 3,200 units in June.The June ending finished goods inventory was 800 units.End-of-month finished goods inventory levels are planned to be equal to 30 percent of next month's planned sales.
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The planned production for Denver Corporation for July is
A) 3,360 units.
B) 4,640 units.
C) 1,440 units.
D) 5,440 units.

Question

Quizplus · Accepted Answer

To calculate the planned production for July, we need to consider the sales forecast for July and the desired ending inventory for July. The desired ending inventory for July is 30% of August's sales, which is 0.30 * 4,800 = 1,440 units. The beginning inventory for July is the ending inventory from June, which is 800 units. Therefore, the production for July is calculated as: July sales (4,000) + desired ending inventory (1,440) - beginning inventory (800) = 4,640 units.

Denver Corporation Has the Following Sales Forecast for the Next