If Division Inc.expects to sell 300,000 units in 2016, desires ending inventory of 22,000 units, and has 24,000 units on hand as of the beginning of the year, the budgeted volume of production for 2016 is 298,000 units.

Question

Quizplus · Accepted Answer

To determine the budgeted volume of production, we need to use the following formula:

Budgeted volume of production = Expected sales + Desired ending inventory - Beginning inventory

Therefore, plugging in the given information, we get:

Budgeted volume of production = 300,000 + 22,000 - 24,000 
Budgeted volume of production = 298,000

Therefore, the answer is A) True.