The following information is taken from the production budget for the first quarter: Beginning inventory in units 1000 Sales budgeted for the quarter 406000 Capacity in units of production facility 452000 How many finished goods units should be produced during the quarter if the company desires 3000 units available to start the next quarter? Entry field with incorrect answer 404000 454000 409000 40800

The correct answer is 408,000 units

Explanation:

Computing the finished goods units to be produced during quarter is as:

= Desire units - Beginning inventory units

where

Desire units is 3,000

Beginning inventory units is 1,000

So,

=3,000 units - 1,000 units

= 2,000 units

Now, computing the finished goods units as:

Finished goods units = 2,000 units + Sales budgeted for the quarter

Finished goods units = 2,000 units + 406,000 units

Finished goods units = 408,000 units

NOTE: It should be 408,000 not 40800.

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