ABC Company has 10,000 units on hand at the beginning of the year and plans to sell 100,000 units during the year.If the ending inventory needs to be twice the beginning inventory,ABC will need to produce 90,000 units during the year.

Question

Quizplus · Accepted Answer

To calculate the total units required for the year, we need to add the units on hand at the beginning of the year to the units that ABC plans to sell during the year:

10,000 + 100,000 = 110,000

If the ending inventory needs to be twice the beginning inventory, then the ending inventory will be:

2 x 10,000 = 20,000

To calculate the total units that need to be produced during the year, we need to subtract the ending inventory from the total units required:

110,000 - 20,000 = 90,000

Therefore, ABC will need to produce 90,000 units during the year, making the statement true.

ABC Company Has 10,000 Units on Hand at the Beginning