Question

Lea Company produces hand tools. Budgeted sales for March are 10,600 units. Beginning finished goods inventory in March is budgeted to be 1,700 units, and ending finished goods inventory is budgeted to be 1,600 units. How many units will be produced in March?

• 10,700

• 10,600

• 10,500

• 13,900

Answer 1

Option(C) 10,500 units is correct.

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*No.of units produced = Budgeted Sales + Ending FG Inventory - Beginning FG Inventory

*No. of units produced = 10,600 + 1,600 - 1,700

*No. of units produced = 10,500 units.

****

Calculation Tallied:

Particulars	Units
Beginning FG Inventory	1,700
Add: Produced units	10,500
Less: Ending FG Inventory	(1,600)
Budgeted Sales	10,600

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