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Roberts Enterprises has budgeted sales in units for the next five months as follows: June: 4670...

Roberts Enterprises has budgeted sales in units for the next five months as follows:

June: 4670 units

July:    7950 units

August: 5470 units

September: 7040 units

October: 3870 units

Past experience has shown that the ending inventory for each month must be equal to 30% of the next month's sales in units. The inventory on May 31 contained 1401 units. The company needs to prepare a production budget for the second quarter of the year.

The total number of units to be produced in July is:

9591 units

8404 units

7950 units

7026 units
business   accounting   
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Answer #1

Units to be produced in July

= Budgeted sales + Desired ending inventory - Beginning inventory

= 7950 + (5470*30%) - (7950*30%)

= 7950 + 1641 - 2385

= 7206 units

Option D is the answer

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