Noel Enterprises Has Budgeted Sales in Units for the Next

Multiple Choice

Noel Enterprises has budgeted sales in units for the next five months as follows: Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 400 units. The company needs to prepare a production budget for the second quarter of the year. The desired ending inventory for August is:

A) 720 units
B) 460 units
C) 540 units
D) 380 units