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I didn’t understand at all why did u increased X from 2000 units to 2100, just by taking difference between opening and closing inventory and adding it to 2000 budgeted sales figure when doing requirement B in lecture 2. It didn’t make any sense too me. Plz hlp regarding the inventory thing that how it affects our production budget not to be same as sales budget.
They need to produce enough units to have enough units to sell and also to have enough units to increase the inventory.
The intend to sell 2,000 units, so obviously they need to produce 2,000 units. In addition they intend to increase their inventory by 100 units which means they will need to produce another 100 units in addition to the 2,000 they are expecting to sell.
Maybe in the past they have kept running out of inventory because big orders would suddenly appear, so they have decided to increase the level to be safe.
We don’t know the reason here, but the question says that they want to increase the inventory and so we therefore need to produce more.Thankyou very much for ypur reply Sir. Can I do Chapter 19, 20, 21 before doing chapter 17 and 18. Is the knowledge of semi variable costs i.e. chapter 17 and time series analysis i.e. chapter 18 necessary to do chapter 19, 20 and 21???
You can do the chapters in any order you want, but it would make more sense to do them in number order.
(17 and 18 are not necessary for the later chapters)So the knowledge of 17 and 18 is not necessary for 19, 20 ,21??? And if I do them before chapter 17 and 18 i will face no issues regarding concepts.???
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