Asked by Artem Balatskiy on May 27, 2024
Verified
If Division Inc. expects to sell 200,000 units in the current year, desires ending inventory of 24,000 units, and has 22,000 units on hand as of the beginning of the year, the budgeted volume of production for the year is 202,000 units.
Budgeted Volume
The projected quantity of sales or production specified in a company's budget, used for financial and operational planning.
Ending Inventory
The total value of all unsold goods that a company holds at the end of an accounting period.
Expected Sales
Forecasted revenue from goods or services sold in a future period, often used for budgeting and planning.
- Determine the planned production volume by analyzing forecasted sales, ending inventory, and initial inventory levels.
Verified Answer
CF
Chanapai FeaungpongpimolMay 27, 2024
Final Answer :
True
Explanation :
To meet the sales and desired ending inventory levels, Division Inc. needs to produce enough units to cover the sales and increase inventory to the desired level. This is calculated as follows: Sales (200,000 units) + Desired Ending Inventory (24,000 units) - Beginning Inventory (22,000 units) = 202,000 units needed for production.
Learning Objectives
- Determine the planned production volume by analyzing forecasted sales, ending inventory, and initial inventory levels.