Question

Which of the following is required to arrive at the budgeted units to be produced in a year?*

A) estimated direct materials inventory required at the end of the year
B) estimated finished goods inventory required at the end of the year
C) amount of direct materials to be used during the year
D) amount of manufacturing overhead to be incurred

Answer 1

To calculate budgeted units to be produced, the estimated finished goods inventory required at the end of the year is needed, as it helps ensure enough products are available to meet demand without excess production.

Step-by-step explanation:

To determine the budgeted units to be produced in a year, you need to understand how many units are expected to be sold, plus the estimated inventory levels.

While direct materials and manufacturing overhead are crucial for the cost of production, the specific factor required to calculate the budgeted units for production is B) estimated finished goods inventory required at the end of the year. This is needed along with the beginning inventory and the sales forecast to ensure that there are enough finished goods to meet the expected demand without overproducing.