In the production budget for a manufacturing firm, the number of units needed in inventory is determined by

Question

Quizplus · Accepted Answer

The number of units needed in inventory is determined by the sum of the desired ending inventory and the number of units to be sold. This ensures that the firm will have enough inventory to meet demand while also minimizing the costs associated with carrying excess inventory. Beginning inventory is not a factor in this calculation as it is a given at the start of the budget period, and the inventory model may be used to inform this calculation, but it is not the sole determinant.

In the Production Budget for a Manufacturing Firm, the Number