Asked by Walter Enrique on May 21, 2024
Verified
If the expected sales volume for the current period is 8,000 units, the desired ending inventory is 1,400 units, and the beginning inventory is 1,200 units, the number of units set forth in the production budget, representing total production for the current period, is
A) 10,600 units
B) 8,200 units
C) 66,000 units
D) 6,800 units
Direct Materials
Raw materials and components that are directly used in the manufacturing of a product.
Inventory
Goods and materials held by a business for the purpose of resale or production.
Production Budget
A production budget is a financial plan that estimates the number of units to be produced to meet anticipated sales.
- Understand how to calculate total production needs based on sales forecasts, beginning inventory, and desired ending inventory levels.
Verified Answer
KW
Kaylan WilsonMay 22, 2024
Final Answer :
B
Explanation :
To calculate the total production for the current period, we use the formula: Production = Expected Sales + Desired Ending Inventory - Beginning Inventory. Plugging in the given numbers: 8,000 (Expected Sales) + 1,400 (Desired Ending Inventory) - 1,200 (Beginning Inventory) = 8,200 units.
Learning Objectives
- Understand how to calculate total production needs based on sales forecasts, beginning inventory, and desired ending inventory levels.
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