Question

Terrence Corporation plans to sell 35,000 units of its single product in March. The company has 2,200 units in its March 1 finished-goods inventory and anticipates having 1,800 completed units in inventory on March 31. On the basis of this information, how many units does Terrence plan to produce during March

Answer 1

Budgeted production in units = 34,600 units.

Step-by-step explanation:

Budgeted production in units = Budgeted sales + Ending finished goods inventory - Beginning finished goods inventory

Given,

Budgeted sales = 35,000 units

Ending finished goods inventory = 1,800 units

Beginning finished goods inventory = 2,200 units

Putting the values into the formula, we can get

Budgeted production in units = Budgeted sales + Ending finished goods inventory - Beginning finished goods inventory

or, Budgeted production = 35,000 + 1,800 - 2,200

or, Budgeted production = 36,800 - 2,200

or, Budgeted production = 34,600 units.