Question

The production budget shows expected unit sales of 40000. Beginning finished goods units are 3800. Required production units are 41600. What are the desired ending finished goods units

Answer 1

desired ending inventory= 5,400 units

Step-by-step explanation:

Giving the following information:

Sales= 40,000 units

Beginning finished goods= 3,800 units

Production= 41,600 units

To calculate the desired ending inventory, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

41,600= 40,000 + desired ending inventory - 3,800

41,600 + 3,800 - 40,000= desired ending inventory

desired ending inventory= 5,400 units