Question

Basile Corporation has budgeted sales of 36,000 units, target ending finished goods inventory of 4,000 units, and beginning finished goods inventory of 1,800 units. How many units should be produced next year?a. 41,800 unitsb. 29,800 unitsc. 38,200 unitsd. 34,000 units

Answer 1

Answer:

c. 38,200 units

Explanation:

The movement in the inventory account will be due to sales and production. Sales reduces the inventory balance while production increases it.

Given

budgeted sales of 36,000 units,

target ending finished goods inventory of 4,000 units,

and beginning finished goods inventory of 1,800 units

Let the units to be produced be t

1800 + t - 36000 = 4000

t = 4000 + 36000 - 1800

t = 38,200

38,200 units should be produced next year.