Answer:
The number of units that would appear in June's production budget are 297000 units.
Explanation:
The production in June will contain 80% units that relates to June's budgeted sales and 20% units that relate to July's budgeted sales. Thus, the number of units that are to be produced in June are:
June's Production = 0.8 * 295000 + 0.2 * 305000 = 297000 units
Thus, in June, 297000 units will be produced.
Answer:
297,000 units
Explanation:
Key to note is that the JIT policy allows that ending inventory must equal 20% of the next month's sales. This is an important consideration in determining the amount to be produced in the month as the relationship between all these may be stated as
Opening balance + production - units sold = closing balance
Ending balance for June = 20% * 305,000
= 61,000 units
59,000 + production - 295,000 = 61,000
Production = 61,000 + 295,000 - 59,000
= 297,000 units
