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Budgeted sales of x for december are 18000 units at the end of the production process for x 10% of production units are scrapped as defective. opening inventories of x for December are budgeted to be 15000 units and closing inventories will be 11400 units. all inventories of finished goods must have successfully passed the quality control check. the production budget for x for December in units is.
a)12960
b)14400
c)15840
d)16000sir the poblem which i am facing in this question is of the percentage it is taking the total production units which i have calculated is 14400 units of which 10 percent would be 1440 units but in the exam kit i have checked the answer it is taking 1600 in place of 1440 how is this possible?? please explain thank you
For every 100 produced, 10 (10%) would be defective which would leave only 90 good units.
Or, putting it the other way round, for every 90 good units they would have made 100 and scrapped 10.They produce 14400 good units, and so they would have actually produced 100/90 x 14,400 = 16,000 units, and scrapped 1,600 (10%).
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