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

77,500 units

Step-by-step explanation:

Projected sales = 78,000 machines

Opening inventory = 6,500 units

Closing inventory = 6,000 units

We will use the formulae below to calculate Budgeted production in unit.

Closing inventory = Opening inventory + Production - Sales

6,000 = 6,500 + Production - 78,000

Production = 6,000 - 6,500 + 78,000

= 77,500 units.

Therefore, Budgeted production is 77,500 units