Question

Lea Company produces hand tools. Budgeted sales for March are 10,500 units. Beginning finished goods inventory in March is budgeted to be 2,100 units, and ending finished goods inventory is budgeted to be 1,400 units. How many units will be produced in March

Answer 1

Answer: 9,800 units

Step-by-step explanation:

GIVEN the following ;

Total budgeted sales = 10,500 units

Beginning inventory = 2,100 units

Ending inventory =1400 units

Units to be produced =?

Recall;

Total budgeted sales = beginning inventory + produced or purchased inventory - ending inventory

10,500 = 2,100 + produced inventory - 1,400

10,500 = 700 + produced inventory

Produced inventory = 10,500 - 700

Produced inventory = 9,800 units

Answer 2

9,800 units were produced in March

Step-by-step explanation:

Ending inventory is calculated by adding Beginning inventory in production for the year and deducting any items sold during the year.

The formula for Ending Inventory is as follow

Ending Finished Goods Inventory = Beginning Finished Goods Inventory + Production in the period - Sales Made During the period

As we have the ending Inventory we need to calculate the production during March. Placing the available amounts in the formula

1,400 units = 2,100 units + Production in the period - 10,500 units

1,400 units -2,100 units + 10,500 units = Production in the period

Production in the period = 9,800 units