Question

Motorcycle Manufacturers, Inc., projected sales of 54,500 machines for the year. The estimated January 1 inventory is 6,860 units, and the desired December 31 inventory is 7,420 units. The budgeted production for the year is ___.

Answer 1

55,060 machines

Step-by-step explanation:

Projected sales = 54,500

Estimated opening balance = 6,860

Desired ending balance = 7,420

Budgeted production = ?

Let the budgeted production be B

Using the formula

Opening balance + Budgeted production - Sales = Closing balance

6,860 + B - 54,500 = 7,420

B = 7,420 + 54,500 - 6,860

B = 55,060

The budgeted production for the year is 55,060 machines.