Production and sales estimates for June are as follows: Estimated inventory (units), June 1 18,500 Desired inventory (units), June 30 19,000 Expected sales volume (units): Area X 3,000 Area Y 4,000 Area Z 5,500 Unit sales price $20. The number of units expected to be manufactured in June is: a.10,000. b.12,000. c.13,000. d.12,500.
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To determine the number of units expected to be manufactured in June, we can use the following formula:
Units to be manufactured = Expected sales + Desired ending inventory - Beginning inventory
We can plug in the values given as follows:
Expected sales = Sales in Area X + Sales in Area Y + Sales in Area Z = 3,000 + 4,000 + 5,500 = 12,500 units
Desired ending inventory = 19,000 units (given) Beginning inventory = 18,500 units (given)
Now, we can calculate the units to be manufactured:
Units to be manufactured = 12,500 + 19,000 - 18,500 Units to be manufactured = 31,500 - 18,500 Units to be manufactured = 13,000
Therefore, the number of units expected to be manufactured in June is 13,000 (Option c).