If Division Inc. expects to sell 200,000 units in the current year, desires ending inventory of 24,000 units, and has 22,000 units on hand as of the beginning of the year, the budgeted volume of production for the year is 198,000 units.

Question

Quizplus · Accepted Answer

The budgeted volume of production is calculated as follows: Expected sales + Desired ending inventory - Beginning inventory = 200,000 + 24,000 - 22,000 = 202,000 units.