If the budget sales units are 8000, the ending inventory is 2000 units and the beginning inventory is 3000, then the budget production would be ___________?
Correct answer: D. 7000 units
- A. 11000 units
- B. 13000 units
- C. 10000 units
- D. 7000 units
Explanation
Required production equals budgeted sales plus desired ending inventory minus beginning inventory: 8,000 + 2,000 - 3,000 = 7,000 units. Beginning inventory reduces the number of new units that must be produced.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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