Denton 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,Denton will need to produce 90,000 units during the year.

Question

Quizplus · Accepted Answer

The calculation for necessary production is incorrect. If the ending inventory needs to be twice the beginning inventory, that means the ending inventory will be 20,000 units (10,000 x 2). Based on this, the total units needed for the year would be 120,000 (100,000 + 20,000). To determine the necessary production, you would subtract the beginning inventory from the total units needed, so it would be 110,000 (120,000 - 10,000). Therefore, the answer is false.

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