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2 February, 23:07

Orange Corporation has budgeted sales of 23 comma 000 units, targeted ending finished goods inventory of 4 comma 000 units, and beginning finished goods inventory of 5 comma 000 units. How many units should be produced next year?

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  1. 2 February, 23:11
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    22000 units

    Explanation:

    The movement in the balance of supplies at the start and end of a period is as a result of usage and purchases. While usage reduces the balance in supplies, purchases increase the balance. This may be expressed mathematically as

    Opening balance + purchases/production - units used/sold = closing balance

    Considering the equation above,

    5000 + production - 23000 = 4000

    Production = 4000 + 23000 - 5000

    = 22000 units
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Home » Business » Orange Corporation has budgeted sales of 23 comma 000 units, targeted ending finished goods inventory of 4 comma 000 units, and beginning finished goods inventory of 5 comma 000 units. How many units should be produced next year?
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