Question

LO 7.2The units required in production each period are computed by which of the following methods?

adding budgeted sales to the desired ending inventory and subtracting beginning inventory
adding beginning inventory, budgeted sales, and desired ending inventory
adding beginning inventory to budgeted sales and subtracting desired ending inventory
adding budgeted sales to the beginning inventory and subtracting the desired ending inventory.

Answer 1

Adding budgeted sales to the desired ending inventory and subtracting beginning inventory

Step-by-step explanation:

Initial inventory plus units produced during the period must equal budgeted sales added to the ending inventory in order to correctly balance production flow. Therefore, units required in production are given by adding budgeted sales to the desired ending inventory and subtracting beginning inventory.