Question

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. What is the budgeted production (in units) for the year?

Answer 1

Answer:

77,500 Units

Explanation:

Given the following information about Motorcycle Manufacturers, Inc.;

Projected sales = 78,000 machines

Opening inventory = 6,500 machines

Closing inventory = 6,000 machines

Budgeted production = ?

Using the formula

Closing inventory = Opening inventory + production - sales

6000 = 6500 + production - 78000

Production = 78000 + 6000 - 6500

                   = 77,500 Units

Budgeted production = 77,500 Units