FRANCORP is preparing budgets for the quarter ending March 31. Budgeted sales for the next 5 months are as follows: January – 16250 units February – 16950 units March –

FRANCORP is preparing budgets for the quarter ending March 31. Budgeted sales for the next 5 months are as follows: January – 16250 units February – 16950 units March – 17200 units April – 18350 units May – 17900 units The selling price per unit is $15. Assume all sales are on account. This means that all sales ARE NOT CASH SALES. They are waiting for their customers to pay. FRANCORP’S collection pattern is: 25% in the month of sale 60% in the month following sale 15% in the second month following sale FRANCORP wants ending inventory to be equal to 30% of the following month’s budgeted sales in units. As well, assume on December 31 of the previous quarter 5,500 units were on hand. Determine the required production units for the month of March. a. 15,500 units b. 19,100 units c. 18,075 units d. 17,545 units

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