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On March 31 of Year 1, Alan Company had finished goods inventory of 2,500 units. Starting in April, Alan intends to have an inventory policy

On March 31 of Year 1, Alan Company had finished goods inventory of 2,500 units. Starting in April, Alan intends to have an inventory policy of maintaining ending inventory at the end of every month equal to half of the next month sales. Forecasted sales for the months April, Year 1 through July, Year 1 are as follows:

  • April: 2,000 units
  • May: 3,500 units
  • June: 4,000 units
  • July: 6,500 units

What is the amount of budgeted PRODUCTION for June?

a $4,250

b $4,500

c $4,750

d $5,000

e $5,250

f $5,500

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