Question

Magnolia, Inc. has budgeted sales for the first quarter of the next year to be 45,000 units. The inventory on hand at the beginning of quarter is 5,000 units. The desired ending inventory is 3,000 units. Calculate the budgeted production for the first quarter.

Answer 1

Production= 43,000 units

Step-by-step explanation:

Giving the following information:

Sales= 45,000 units

Beginning inventory= 5,000 units

The desired ending inventory is 3,000 units.

To calculate the budgeted production, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

Production= 45,000 + 3,000 - 5,000

Production= 43,000 units