PE 22-2B Production budget

Magnolia Candle Co. projected sales of 75,000 candles for 2014. The estimated January 1, 2014, inventory is 3,500 units, and the desired December 31, 2014, inventory is 2,700 units. What is the budgeted production (in units) for 2014?

Answer:


Expected units to be sold………………………………………………………………… 75,000 
Plus desired ending inventory, December 31, 2014…………………………………   2,700 
Total…………………………………………………………………………………………… 77,700 
Less estimated beginning inventory, January 1, 2014………………………………   3,500 
Total units to be produced………………………………………………………………… 74,200