Question

Terrence Corporation plans to sell 41,000 units of its single product in March. The company has 2,800 units in its March 1 finished-goods inventory and anticipates having 2,400 completed units in inventory on March 31. On the basis of this information, how many units does Terrence plan to produce during March

Answer 1

Answer:

40,600 units

Explanation:

Data provided as per the question below:-

Closing stock = 2,400

Expected sales = 41,000

Opening stock = 2,800

The computation of units to be Produced by Yorkley Corporation is shown below:-

Units to be produced = Closing stock + Expected sales - Opening stock

= 2,400 + 41,000 - 2,800

= 43,400 - 2,800

= 40,600 units

Answer 2

The Production Budget for the month of March will be 41,400 units. Terrance plans to produce 41,400 units during the month of March to make sales of 41,000 units.

What is a production budget?

The production budget is a budget that determines the quantity of factory product that should be produced during the budget period. This budget is determined by the product unit or quantity. Many other budgets are stated in the form of dollars instead of value.

As per the given information,

Opening Inventory is equal to 2,800 Units

Closing Inventory is equal to 2,400 Units

Budgeted Sales = 41,000 Units

$\rm\,Production\,Budget = \rm\,(Beginning\,Inventory+ Budgeted \,Sales-Closing\,Inventory)$

$\rm\,Production\, Budget = 2,800 + 41,000 - 2,400\\\\\rm\,Production\, Budget = 41,400\,Units$

Hence, The Production Budget for the month of March will be 41,400 units.

To learn more about Production Budget, refer to the link:

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