Question

Vitale Hair Spray had sales of 13,000 units in March. A 70 percent increase is expected in April. The company will maintain 30 percent of expected unit sales for April in ending inventory. Beginning inventory for April was 650 units. How many units should the company produce in April?

Short answer

The number of units should be produced by the company for April is 28,080.

Step-by-step solution

Increment in sales unit

$\begin{array}{rcl}\mathrm{Increment}\mathrm{in}\mathrm{sales}\mathrm{unit}& =& \mathrm{Sales}\mathrm{unit}\mathrm{of}\mathrm{March}\times \mathrm{Increment}\mathrm{percentage}\\ & =& 13,000\times 70\%\\ & =& 9,100\end{array}$

Expected sales units of april

$\begin{array}{rcl}\mathrm{Expected}\mathrm{sales}\mathrm{unit}& =& \mathrm{Sales}\mathrm{unit}\mathrm{of}\mathrm{march}+\mathrm{Increased}\mathrm{unit}\\ & =& 13,000+9,100\\ & =& 22,100\end{array}$

Year ending inventory of april

$\begin{array}{rcl}\mathrm{Year}\mathrm{ending}\mathrm{inventory}& =& \mathrm{Expected}\mathrm{sales}\mathrm{units}\mathrm{of}\mathrm{april}\times \mathrm{Percentage}\mathrm{of}\mathrm{ending}\mathrm{inventory}\\ & =& 22,100\times 30\%\\ & =& 6,630\end{array}$

Number of units to be produced

$\begin{array}{rcl}\mathrm{Number}\mathrm{of}\mathrm{units}\mathrm{produced}& =& \mathrm{Sales}\mathrm{units}+\mathrm{Ending}\mathrm{inventory}-\mathrm{Opening}\mathrm{units}\\ & =& 22,100+6,630-650\\ & =& 28,080\end{array}$