Answer:
Total Production for the month of November shall be = 26,800 units
Explanation:
Sales for the month shall be as follows:
October = 28,000
November = 25,000
December = 31,000
It is provided that inventory of finished goods at month end = 30% of next month's sales.
Thus Opening Inventory of November = 30% of sales
= 25,000 [tex]\times[/tex] 30% = 7,500 units
Total Production for the month shall be = Sales for the month - Opening Inventory + Closing inventory to be maintained.
Sales for the month = 25,000
Opening Inventory = 7,500
Closing Inventory to be maintained = 31,000 [tex]\times[/tex] 30% = 9,300
Thus, Total Production for the month of November shall be = 25,000 - 7,500 + 9,300 = 26,800 units
