Q242
Budgeted sales of X for March are 18000 units. At the end of the production process for X, 10% of production units are scrapped as defective. Opening inventories of X for March are budgeted to be 15000 units and closing inventories will be 11,400 units. All inventories of finished goods must have successfully passed the quality control check. The production budget for X for March, in units is:
A.
12960
B.
14400
C.
15840
D.
16000
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Budgeted sales 18000
Budgeted reduction in finished goods (3600) = 15000-11400
Budgeted production of completed units 14400
Allowance for defective units
(10%of output=1/9 of Input) 1600
Production budget 16000