Question

1. If Bodin Company plans to sell 480,000 units during the year, compute the number of units the firm would have to manufacture during the year. Hilton, Ronald. Managerial Accounting: Creating Value in a Dynamic Business Environment (p. 405). McGraw-Hill Higher Education. Kindle Edition.

Answer 1

Answer:

A.

Bodin will have to manufacture 450,000 units and procure materials of 910units (if it plans to sell 480,000 units in the year)

B.

If it plans to sell 500,000 units however, it will have to produce additional stock of 470,000 units and procure materials of 950,000 units.

Explanation:

Production planning is a key requirement during the budget process

It works side by side with the sales budget. It is intended to fulfill the projected demand the business is positioning itself for in the period being reviewed.

It considers all levels of production needs in achieving each unit of production. Raw material, labour, conversion costs etc.

Kindly review the attached for the detailed presentation of answers.

Answer 2

Answer:

450,000 Units

Explanation:

The complete part of the question is as below:

Bodin Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are planned for the year 20x1. Two units of raw material are required to produce each unit of finished product.

                             January 1  December 31

Raw material         35,000    45,000  

Work in process   12,000    12,000  

Finished goods   80,000    50,000

Solution:

Units to be manufactured to sell 480,000 Units = Sales + Closing Inventroy - Opening Inventory

= 480,000 + 50,000 - 80, 000 = 450, 000 Units

The number of units Bodin would have to manufacture is 450,000 Units