Nichols Company Sells a Product for £20

Multiple Choice

Nichols Company sells a product for £20. Budgeted sales for the first quarter of the current year are as follows: The company wants to maintain an inventory of finished units equal to 30 percent of the following month's sales, and 1,000 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 10 percent of the following month's production needs.
Budgeted production in units for February would be

A) 2,500
B) 3,100
C) 3,850
D) 4,600