The following information is taken from the production budget for the first quarter: Beginning inventory in...

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The following information is taken from the production budget for the first quarter: Beginning inventory in...

The following information is taken from the production budget for the first quarter:

Beginning inventory in units 1,200

Sales budgeted for the quarter 456,000

Capacity in units of production facility 472,000

How many finished goods units should be produced during the quarter if the company desires 3,200 units available to start the next quarter?

a. 458,000

b. 454,000

c. 474,000

d. 459,200

business accounting

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Answer 1

Answer #1

Concepts and reason

Budget: Budget is nothing but an estimate of income and expenses for a period which is yet to occur. It helps in taking corrective action by the management by comparing the same with the actual results.

Fundamentals

Normal capacity of production: It is the capacity which is expected by the organization to be achieved on an average during the period by it considering any normal loss which is incurred ordinary course of business.

Production budget helps the company in estimating the units it is required to produce on the basis of their requirement and capacity.

Sales = Beginning inventory + production - ending inventory
Production = Ending inventory + sales - beginning inventory
= 3,2

Ans:

Finished goods units that should be produced during the quarter is 458,000 units.

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Answer 2

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