Question

Motorcycle Manufacturers, Inc. projected sales of 57,500 machines for the year. The estimated January 1 inventory is 6,750 units, and the desired December 31 inventory is 7,130 units. What is the budgeted production (in units) for the year?

a. 57,880

b. 57,500

c. 43,620

d. 57,120

Below is budgeted production and sales information for Flushing Company for the month of December:

	Product XXX	Product ZZZ
Estimated beginning inventory	28,600 units	16,800 units
Desired ending inventory	35,500 units	14,500 units
Region I, anticipated sales	339,000 units	263,000 units
Region II, anticipated sales	187,000 units	146,000 units

The unit selling price for product XXX is $4 and for product ZZZ is $14.

Budgeted sales for the month are

a.$7,830,000

b.$9,000,000

c.$13,090,000

d.$3,740,000

Answer 1

1) Budgeted Production (in units) = Budgeted Sales in units+Desired Ending Inventory-Beginning Inventory

= 57,500+7,130-6,750 = 57,880 units

Therefore, the budgeted production (in units) for the year is 57,880 units. Hence the correct option is a) 57,880.

2) Total Sales in units for Product XXX = Region 1 Sales+Region 2 Sales

= 339,000 units+187,000 units = 526,000 units

Sales Value of Product XXX = 526,000 units*$4 per unit = $2,104,000

Total Sales in units for Product ZZZ = Region 1 Sales+Region 2 Sales

= 263,000 units+146,000 units = 409,000 units

Sales Value of Product ZZZ = 409,000 units*$14 per unit = $5,726,000

Budgeted Sales for the month = Sales Value of Product XXX+Sales Value of Product ZZZ

= $2,104,000+$5,726,000 = $7,830,000

Therefore, the budgeted sales for the month is $7,830,000. Hence the correct option is a) $7,830,000.