Detmer Enterprises Has Budgeted Sales for the Next Five Months

Detmer Enterprises has budgeted sales for the next five months as follows: Past experience has shown that the ending inventory for each month should be equal to 10% of the next month's sales in units. The inventory on December 31 contained 400 units, which was in excess of the desired level of inventory. The company needs to prepare a Production Budget for the first quarter of the year.
-The desired ending inventory for April is:

A) 460 units
B) 540 units
C) 720 units
D) 680 units

Correct Answer:

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