Bronco Company Sells a Product for £10 The Company Wants to Maintain an Inventory of Finished Units

Multiple Choice

Bronco Company sells a product for £10. Budgeted sales for the first quarter of the current year are as follows: $\begin{array}{lc} & \text { Budgeted Sales } \\\text { January } & £ 600,000 \\\text { February } & 800,000 \\\text { March } & 900,000\end{array}$ The company wants to maintain an inventory of finished units equal to 30 per cent of the following month's sales, and 10,000 units are on hand at the beginning of the year. Each unit requires two pounds of raw material costing £1 per pound. The company maintains a raw materials inventory equal to 20 per cent of the following month's production needs.
Budgeted production in units for February would be

A) 131,000.
B) 107,000.
C) 83,000.
D) 80,000.