Question

The following information is taken from the production budget for the first quarter: Beginning inventory in units 1,200 Sales budgeted for the quarter 426,000 Capacity in units of production facility 472,000 How many finished goods units should be produced during the quarter if the company desires 3,200 units available to start the next quarter?

Answer 1

Answer:

428,000 units

Explanation:

The number of units to be produced is dependent on the desired closing units, the sales and opening balances.

The relations between all the elements is given as

Opening balance + Units produced - Sales = Closing balance

let the goods produced be T

1200 + T - 426000 = 3200

T = 426000 + 3200 - 1200

T = 428,000

The company should produce 428,000 units  during the quarter if the company desires 3,200 units available to start the next quarter. This number is still within the Capacity in units of production facility of 472,000.