Donnelly Manufacturing Donnelly Manufacturing Sells Cedar Birdhouses

question 103

Multiple Choice

Donnelly Manufacturing Donnelly Manufacturing sells cedar birdhouses. The company has prepared the following sales forecast for the third quarter of 2013:
Inventory at June 30, 2013 was budgeted at 1,500 units. Management would like the desired quantity of finished goods inventory at the end of each month to be equal to 15% of next month's budgeted unit sales. October's sales are projected to be 24,000 units.
Each completed unit of finished product requires 2.5 square feet of cedar at a cost of $3.5 per square foot.
Refer to the Donnelly Manufacturing information above. The total required production of birdhouses for the third quarter of 2013 is:

• A) 39,900 units
• B) 44,100 units
• C) 45,600 units
• D) 40,500 units

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