For next year, Galliart, Inc., has budgeted sales of 60,000units, target ending

Question

For next year, Galliart, Inc., has budgeted sales of 60,000units, target ending finished goods inventory of 3,000 units, andbeginning finished goods inventory of 1,800 units. All otherinventories are zero. How many units should be produced nextyear?   61,200? For next year, Galliart, Inc., has budgeted sales of 60,000units, target ending finished goods inventory of 3,000 units, andbeginning finished goods inventory of 1,800 units. All otherinventories are zero. How many units should be produced nextyear?   61,200? 61,200?

Explanation / Answer

Yes 61,200 units should be produced to sell 60,000 units andmaintain 3,000 in ending FG stock. This data can be presented inthe following form. Budgetedsales                     60,000units Ending FGinventory               3,000units Total FGrequired                63,000 units Less : Begininginventory         1,800units Units to be produced         61,200units

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