Question

Forrest Company manufactures phone chargers and has a JIT policy that ending inventory should equal 20% of the next month’s estimated unit sales. It estimates that October’s actual ending inventory will consist of 92,000 units. November and December sales are estimated to be 460,000 and 390,000 units, respectively. Compute the number of units to be produced in November.

Answer 1

Answer:

Total= 446,000 units

Explanation:

Giving the following information:

The inventory should equal 20% of the next month’s estimated unit sales. It estimates that October’s actual ending inventory will consist of 92,000 units. November and December sales are estimated to be 460,000 and 390,000 units, respectively.

Production:

Sales= 460,000

Ending inventory= (390,000*0.2)= 78,000

Beginning inventory= (92,000)

Total= 446,000 units