Mobile Company manufactures phone chargers and has a JIT policy that ending inve
ID: 2430686 • Letter: M
Question
Mobile Company manufactures phone chargers and has a JIT policy that ending inventory must equal 20% of the next month’s sales. It estimates that October’s actual ending inventory will consist of 43,000 units. November and December sales are estimated to be 490,000 and 380,000 units, respectively.
Compute the number of units to be produced that would appear on the company’s production budget for the month of November.
Mobile Company manufactures phone chargers and has a JIT policy that ending inventory must equal 20% of the next month’s sales. It estimates that October’s actual ending inventory will consist of 43,000 units. November and December sales are estimated to be 490,000 and 380,000 units, respectively.
Compute the number of units to be produced that would appear on the company’s production budget for the month of November.
Explanation / Answer
Mobile Company
Production Budget
For the Month Ended November 30
Budgeted ending inventory(380,000 × 20%) 76,000 Budgeted sales for the month 490,000 Required units of available production 566,000 Budgeted beginning inventory 43,000 Units to be produced 523,000