Question

Motorcycle Manufacturers, Inc., projected sales of 51,500 machines for the year. The estimated January 1 inventory is 6,000 units, and the desired December 31 inventory is 7,410 units. The budgeted production for the year is:________

Answer 1

Answer:

Budgeted Production = 52910 units

Explanation:

The budgeted production should be enough to meet the yearly sales requirement plus provide enough inventory at the year end to cover for the required level of desired inventory. The opening inventory at the start of the year should be deducted to calculate the budgeted production.

Budgeted production = Sales + Closing Inventory - Opening Inventory

Budgeted Production = 51500 + 7410 - 6000

Budgeted Production = 52910 units