Question

​Bulldog, Inc. has budgeted sales for the first quarter of the next year to be 45 comma 000 units. The inventory on hand at the beginning of quarter is 5 comma 000 units. The desired ending inventory is 4 comma 000 units. Calculate the budgeted production for the first quarter.

Answer 1

The budgeted production for the first quarter is 44,000 units

Step-by-step explanation:

The budgeted production for first quarter is summarized below

Sales for the quarter 45,000

desired ending inventory 4,000

less opening inventory (5000)

Budgeted production 44,000

The rationale for this computation is that the opening inventory is already in stock,hence a portion of the sales quantity is already at hand and should be deducted from forecast sales,whereas the planned inventory that is envisaged to care of any unusual spike in demand is added to the forecast sales figures for the quarter in order to arrive the desired production level.