Finished goods inventory at the end of december was 600, Accounting Basics

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Finished goods inventory at the end of december was 600

Question: Watson Corporation manufactures boxes. The estimated numbers of boxes sold for the first three months of the current year are as follows:

Month Sales

January 3,000

February 4,200

March 3,900

Finished goods inventory at the end of December was 600 units. Ending finished goods inventory is equal to 20% of the next month's sales. Watson Corporation expects to sell the boxes for $5 each. April sales are projected at 4,500 boxes. How many boxes should be produced in February?

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Accounting Basics: Finished goods inventory at the end of december was 600

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