Madison last month (December) sales were 10,000 units @ $40. The company estimates an increase of 1.5% in sales for January. An increase of 200 units for February (compared to January) and a reduction of 100 units for March (compared to February). The selling price is not expected to change. April sales projections are a 5% increase from December sales.

INVENTORY POLICY

FINISHED GOODS – maintain an ending inventory equal to 25% of next month sales

December finished goods ending inventory was 6,000 units

CALCULATE UNITS TO PRODUCE IN FEBRUARY