Berol Company plans to sell 200,000 units of finished product in July and anticipates a growth rate in sales of 5% per month. The desired monthly ending inventory in units of finished product is 80% of the next month's estimated sales. There are 150,000 finished units in inventory on June 30. Berol Company's production requirement in units of finished product for the three-month period ending September 30 is___________.

Answer :

Answer:

Total production requirements for 3 months = 665720 units

Explanation:

The opening inventory in July should have been 200000 * 0.8 = 160000 units

However there is a shortage of 10000 units as opening inventory is 150000 units.

  • July sales are expected to be 200000 units.
  • August sales will be = 200000 * 105% = 210000 units
  • September Sales will be = 210000 * 105% = 220500 units
  • October Sales will be = 220500 * 105% = 231525 units

The production requirement is to produce enough to match this month's sale along with 80% of next months sale.

The production requirement for 3 months ending 30 september will be,

  • July = (200000-150000) + 0.8 * 210000 = 218000 units
  • August = 210000 * 0.2 + 220500 * 0.8 = 218400 units
  • September = 220500 * 0.2 + 231525 * 0.8 = 229320 units

Total production requirements for 3 months = 218000 + 218400 + 229320 = 665720 units

The company's production is referred to as the production or the manufacturing of the products and services to avail the comfort and fulfill the demand of the customers in the market.  

Total production requirements for 3 months = 665720 units

The opening inventory in July should have been [tex]200000 \times 0.8 = 160000[/tex]units

However, there is a shortage of 10000 units as the opening inventory is 150000 units.

July sales are expected to be 200000 units.

August sales will be = [tex]200000 \times 105\% = 210000 \:units[/tex]

September Sales will be = [tex]210000 \times 105\% = 220500\: units[/tex]

October Sales will be = [tex]220500 \times105\% = 231525\: units[/tex]

The production requirement is to produce enough to match this month's sale along with 80% of next month's sale.

The production requirement for 3 months ending 30 September will be,

July =[tex](200000-150000) + 0.8 \times 210000 = 218000 \:units[/tex]

August = [tex]210000 \times 0.2 + 220500 \times 0.8 = 218400 \:units[/tex]

September = [tex]220500 \times 0.2 + 231525 \times 0.8 = 229320\: units[/tex]

Total production requirements for 3 months = 218000 + 218400 + 229320 = 665720 units

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https://brainly.com/question/24121041

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