Final answer:
ACME should plan to produce 96,000 units, calculated by budgeted sales (100,000 units) plus target ending inventory (7,000 units) minus beginning inventory (11,000 units). This ensures their operating plan covers the anticipated sales and desired inventory levels.
Step-by-step explanation:
The student is asking about budgeting for a company's operating plan, specifically in terms of inventory management. To determine the number of units to produce, we need to consider the budgeted sales, beginning inventory, and target ending inventory. The formula we use is: Budgeted Production = Budgeted Sales + Target Ending Inventory - Beginning Inventory.
Given that ACME is budgeting sales of 100,000 units, has a beginning inventory of 11,000 units, and a target ending inventory of 7,000 units, we can calculate the budgeted production as follows:
- Budgeted Production = 100,000 (Budgeted Sales) + 7,000 (Target Ending Inventory) - 11,000 (Beginning Inventory)
- Budgeted Production = 100,000 + 7,000 - 11,000
- Budgeted Production = 96,000 units
Therefore, ACME should plan to produce 96,000 units to meet its budgeting requirements for the period covered by the operating plan.