A company\'s beginning inventory is 6,000 units. It expects to sell 30,000 units

Question

A company's beginning inventory is 6,000 units. It expects to sell 30,000 units during the month. The desired ending inventory level is 4,500 units. The production budget will be based on: 31,500 units 28,500 units 30,000 units 35,000 units The flexible budget for overhead for a department includes $80,000 for fixed costs and $160,000 for variable costs, based on a normal volume of 20,000 hours. The production level for the month actually 21,000 hours. The total budget allowance under the flexible budget for the month will be: $168,000 $240,000 $248,000 $5250,000 The cost is most likely to be non controllable level is the cost at the producing deptilevel is the cost for. payroll takes property takes material costs ladler costs

Explanation / Answer

20.

Compute the production budget by subtracing beginning inventory from the sum of expected sales and ending inventory.

Production budget = Expected sales+ Desired ending inventory - Beginning inventory

= 30,000 units + 4,500 units - 6,000 units

= 28,500 units

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