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Question - Basic Products Inc. (Basic) produces small home handyman tools, including an electric drill. The sales budget for the first quarter of the fiscal year for the electric drill is as follows:
Unit sales
January 523,000
February 434,500
March 381,500
April's predicted sales are 325,000 units. At the beginning of January, the inventory of electric drills is 104,600 units. Up to and including March, Basic had a policy of maintaining an ending inventory of 20% of next month's sales. As a result of predicted lower sales, Basic decided to lower the ending inventory amount to 10% of the next month's sales for sales beginning in the second quarter. Based on this information, how many units are budgeted to be produced in the month of March?
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