Walsh Company Expects Sales of Product W to Be 60,000

question 32

Multiple Choice

Walsh Company expects sales of Product W to be 60,000 units in April, 75,000 units in May and 70,000 units in June. The company desires that the inventory on hand at the end of each month be equal to 40% of the next month's expected unit sales. Due to excessive production during March, on March 31 there were 25,000 units of Product W in the ending inventory. Given this information, Walsh Company's production of Product W
For the month of April should be how many units:

• A)65,000.
• B)75,000.
• C)60,000.
• D)66,000.

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Definitions:

Transitory Earnings

Earnings that are considered temporary or not expected to persist over time, often removed from projections or models that attempt to predict a company's future profitability.

Extraordinary Loss

Unusual and infrequent charges that are reported separately on a company's income statement, outside of its regular business operations.

Discontinued Operations

Refers to segments or lines of business that a company has decided to sell, dispose of, or otherwise cease operations, and are reported separately from continuing operations in financial statements.

Disposal

The act of getting rid of an asset through sale, exchange, retirement, or destruction.