Question

Motorcycle Manufacturers, Inc. projected sales of 54,000 machines for the year. The estimated January 1 inventory is 6,520 units, and the desired December 31 inventory is 7,450 units. What is the budgeted production (in units) for the year?

Answer 1

54,930 units

Step-by-step explanation:

If Motorcycle Manufacturers, Inc. has 6,520 units in inventory and plans to sell 54,000 units during the year while keeping 7,450 units in inventory, they will need to produce:

budgeted production = projected sales - net changes in inventory = 54,000 - (6,520 - 7,450) = 54,000 - (-930) = 54,930 units