Ecology Co Ending Inventory for Each Month Should Be 20% of the the Following

question 22

Multiple Choice

Ecology Co.sells a biodegradable product called Dissol and has predicted the following sales for the first four months of the current year:
$\begin{array}{ccccc} & \text { Jan. } & \text { Feb. } & \text { March } & \text { April } \\\text { Sales in units } & 1,700 & 1,900 & 2,100 & 1,600\end{array}$

Ending inventory for each month should be 20% of the next month's sales,and the December 31 inventory is consistent with that policy.How many units should be purchased in February?

• A) 1,860
• B) 1,900
• C) 1,940
• D) 1,980
• E) 2,320

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Definitions:

Stock Split

A corporate action that increases the number of shares outstanding by issuing more shares to current shareholders proportionately.

Market Price

The market price currently for acquiring or selling a service or asset.

Dividend Income

Income received from owning shares of a company that pays dividends.

Dividend Per Share

The total dividends declared by a corporation divided by the number of outstanding shares, indicating how much each share receives in dividends.