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Budgeted productions

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Budgeted productions

  • This topic has 3 replies, 2 voices, and was last updated 2 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • March 20, 2023 at 3:14 pm #681590
    amytheja
    Participant
    • Topics: 4
    • Replies: 3
    • ☆

    Hi sir , can you help me with this question

    A company manufactures and sells a single product. At the end of the manufacturing process all units are inspected and 20% are rejected and scrapped. Next year the budgeted sales are 192,000 units and the inventory of finished units will increase by 2,000 units.

    What is next year’s budgeted production (in units) which will be subject to inspection?

    My answer is if 192000 is 80% then total would be 240000. What is the next step ?

    March 20, 2023 at 6:21 pm #681593
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54705
    • ☆☆☆☆☆

    Although they need to have 192000 for the demand, they also need another 2000 to increase inventory. So they need to have 194000 ‘good’ units. So the production will have to be 194000 / 80%.

    March 28, 2023 at 7:44 am #681927
    amytheja
    Participant
    • Topics: 4
    • Replies: 3
    • ☆

    Thank you sir

    March 28, 2023 at 5:25 pm #681944
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54705
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Budgeted productions’ is closed to new replies.

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