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The company wants to end each month with ending finished goods inventory equal to 25% of the next month's sales. Finished goods inventory on June 30 is 1,050 units. The budgeted production units for July are:

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Answer: 4,375 units

Explanation:

The budgeted production for July will be;

= July sales + Ending inventory - Beginning inventory

Ending inventory = 25% * August sales =25% * 4,900 = 1,225

Budgeted production = 4,200 + 1,225 - 1050 = 4,375 units

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