Question

Kid's world industries has projected sales of 67,000 machines for the current year. the estimated january 1 inventory is 6,000 units, and the desired december 31 inventory is 15,000 units. what is the budgeted production (in units) for the year? units

Answer 1

So, let us see the facts. The company needs to sell 67000 units throughout the year. We also need to have 15000 units in the storage so that we have 15000 in December. Hence, we need 82000 totally. But there are also 6000 already in storage. Hence we only need to produce 82000-6000=76000 units. If anything is unclear just comment.