Question

In a production budget, if the number of units in finished goods inventory at the end of the period is less than the number of units in finished goods inventory at the beginning of the period, then the expected number of units sold is less than the number of units to be produced during the period.

 

Answer 1

Answer

• The statement is FALSE.
• If ending units of inventory are LESS than the no. of beginning units of Inventory, it means that no. of units sold are MORE than [not less than] number of units produced during that period.
• Example:

		Case #1	Case #2
A	Beginning units	10,000	11,000
B	Units Produced	15,000	17,000
C	Units Sold [more than units produced]	17,000	18,000
D = A+B-C	Ending Units [less than beginning units]	8,000	10,000