Asked by Ken Xiao Xinhua on Jul 15, 2024
Verified
Motorcycle Manufacturers, Inc., projected sales of 78,000 machines for the year. The estimated January 1 inventory is 6,500 units, and the desired December 31 inventory is 6,000 units. The budgeted production for the year is
A) 78,500 units
B) 70,000 units
C) 77,500 units
D) 70,500 units
Budgeted Production
Budgeted Production involves estimating the quantity of goods or services that a company plans to produce over a specific period as part of its operational and financial planning efforts.
Inventory Units
Units or quantities of stock items kept on hand by a business for the purpose of production or sales.
Projected Sales
An estimate of the amount of sales that a company expects to achieve in a future period, based on various forecasting methods and assumptions.
- Derive projected production and sales numbers considering the specified inventory and sales information.
Verified Answer
AA
Ahmed Ashfaq FattahJul 21, 2024
Final Answer :
C
Explanation :
To calculate the budgeted production, add the desired end inventory to the projected sales and subtract the beginning inventory: 78,000 (projected sales) + 6,000 (desired end inventory) - 6,500 (beginning inventory) = 77,500 units.
Learning Objectives
- Derive projected production and sales numbers considering the specified inventory and sales information.