Question

The following information is taken from the production budget for the first quarter: Beginning inventory in units 1,200; Sales budgeted for the quarter 456,000. How many finished goods units should be produced during the quarter if the company desires to have 3,200 units available to start the next quarter?

Answer 1

Answer:

458,000

Explanation:

Beginning inventory = 1,200 units

Budgeted sales = 456,000 units

Desired ending inventory = 3,200 units

Now,

Production Required is given as:

= ( Budgeted Sales + Ending Inventory Required ) - Beginning Inventory

on substituting the respective values, we get

Production Required = 456,000 + 3,200 - 1,200

or

Production Required = 458000