Question

Antique Brass Company has budgeted sales volume of 120,000 units and budgeted production of 108,000 units, while 20,000 units are in beginning finished goods inventory. How many units are targeted for ending finished goods inventory?*

A) 20,000 units
B) 32,000 units
C) 12,000 units
D) 8,000 units

Answer 1

To determine the number of units targeted for ending finished goods inventory, subtract the budgeted sales volume from the budgeted production and add the beginning finished goods inventory.

Step-by-step explanation:

To determine the number of units targeted for ending finished goods inventory, we need to calculate the desired ending finished goods inventory level. This is given by:

Desired ending finished goods inventory = Budgeted production - Budgeted sales volume + Beginning finished goods inventory

Substituting the given values, we have:

Desired ending finished goods inventory = 108,000 units - 120,000 units + 20,000 units = 8,000 units

Therefore, the answer is D) 8,000 units.