J. J. Johnson has decided to supplement his income by selling beehives. He expec

Question

J. J. Johnson has decided to supplement his income by selling beehives. He expects to sell 25,000 hives in 2014. He ended 2013 with 2,500 completed hives in inventory and would like to complete operations in 2014 with at least 2,800 completed hives in inventory. There is no ending work in process inventory. One beehive holds about 250 bees. The bees are purchased for $4.00 per 1,000 bees. The hives sell for $15.00 each.

How many beehives would the 2014 production budget, of Johnson, identify as needing to be produced?

Explanation / Answer

Hi,

Please find the answer as follows;

Production Needed = Desired Ending Inventory + Expected Sales - Opening Inventory = 2800 + 25000 - 2500 = 25300 Hives

Answer is 25300 hives needs to be produced.

Thanks.

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