If Division Inc. expects to sell 300,000 units in 2012, 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 2012 is 298,000 units.

Question

Quizplus · Accepted Answer

The budgeted volume of production for 2012 can be calculated as follows:

Budgeted volume of production = Expected sales + Ending inventory - Beginning inventory
Budgeted volume of production = 300,000 + 22,000 - 24,000
Budgeted volume of production = 298,000

Therefore, the correct answer is A (True).