Question

For next year, Williams, Inc., has budgeted sales of 19,000 units, targeted ending finished goods inventory of 1,750 units, and beginning finished goods inventory of 1,250 units. All other inventories are zero. How many units should be produced next year

Answer 1

Williams, Inc. should produce 19,500 units for the next year to meet its production requirements, which is calculated using the production formula that accounts for budgeted sales, targeted ending inventory, and beginning inventory.

Step-by-step explanation:

The student's question relates to calculating the number of units Williams, Inc. needs to produce for the next year based on the budgeted sales, targeted ending finished goods inventory, and beginning finished goods inventory. To determine this, one must use the following basic production formula:

Required Production = Budgeted Sales + Targeted Ending Inventory - Beginning Inventory

Plugging in the values:

Required Production = 19,000 units (Budgeted Sales) + 1,750 units (Targeted Ending Inventory) - 1,250 units (Beginning Inventory)

Required Production = 19,000 + 1,750 - 1,250

Required Production = 19,500 units

Therefore, Williams, Inc. should produce 19,500 units next year to meet the production requirements.

Answer 2

Production= 19,500

Step-by-step explanation:

Giving the following information:

Ending finished goods inventory of 1,750 units

Beginning finished goods inventory of 1,250 units.

Sales= 19,000

To calculate production, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

Production= 19,000 + 1,750 - 1,250

Production= 19,500