Question

The production budget shows expected unit sales of 32,000. Beginning finished goods units are 3,600. Required production units are 33,600. What are the desired ending finished goods units?

Answer 1

desired ending inventory 5,200

Step-by-step explanation:

sales for the period 32,000

desired ending inventory ??

Total requirement ??

Beginning Inventory (3,600)

Required production units 33,600

The beginning inventory are units we already have, so it decrease the required production to fulfil the total requiremets

requirement - beginning inventory = production

requirement - 3,600 = 33,600

requirement = 33,600 + 3,600 = 37,200

Then, our requirement is the sum of the sales forthe period and the desired ending inventory

sales + desired ending inventory = required units

32,000 + desired ending inventory = 37,200

desired ending inventory = 37,200- 32,000 = 5,200