Question

Orange Corporation has budgeted sales of 18,000 units, targeted ending finished goods inventory of 4,000 units, and beginning finished goods inventory of 3,000 units. How many units should be produced next year?

Answer 1

19,000 units

Step-by-step explanation:

The applicable formula is the formula for calculating the cost of goods sold.

COGS = beginning inventory+ purchases(production) - ending inventory

COGS will be Budgeted sales = `18,000

Beginning inventory =3,000

Ending inventory =4,000

18,000 = 3,000 + P - 4,000

18,000 = 3,000- 4,000 + P

18,000 = -1000 + P

P= 18,000+1000

P= 19,000