Question

Budgeted production needs are determined by: A. adding budgeted sales in units to the desired ending inventory in units and deducting the beginning inventory in units from this total. B. adding budgeted sales in units to the beginning inventory in units and deducting the desired ending inventory in units from this total. C. adding budgeted sales in units to the desired ending inventory in units. D. deducting the beginning inventory in units from budgeted sales in units.

Answer 1

The correct option is A. dding budgeted sales in units to the desired ending inventory in units and deducting the beginning inventory in units from this total

Step-by-step explanation:

The formula to computed the budgeted production is shown below:

= Ending inventory in units + Budgeted sales in units - Beginning inventory in units.

where,

Ending inventory is the inventory which is left at the end of the year or we can say the closing stock of inventory

Budgeted sales are the sales which is to be sell in the future

Beginning inventory is that inventory which shows at the starting of the year or we can say opening stock of inventory

Therefore, the remaining options are incorrect.

So, the correct option is A. dding budgeted sales in units to the desired ending inventory in units and deducting the beginning inventory in units from this total

Answer 2

Answer: Option (A) is correct.

Step-by-step explanation:

The budgeted production determines the number of units that should be produced. It is derived from the combination of two components i.e. sales forecast and finished goods inventory in hand.

Budgeted production:

= Budgeted sales in units + Desired ending inventory in units - Beginning inventory in units