Question

production budget

quetzaltenango candle inc. projected sales of 700,000 candles for march. the estimated march 1 inventory is 40,000 units, and the desired march 31 inventory is 25,000 units.

prepare a production budget report in units for quetzaltenango candle inc. for those boxes in which you must enter subtracted or negative numbers use a minus sign.

quetzaltenango candle inc.
production budget
for the month ending march 31

line item description | units
expected units to be sold
desired ending inventory, march 31
total units available
estimated beginning inventory, march 1
total units to be produced in march

Explanation:

Identify the given values

Using the Flexible Budgeting knowledge point

• Projected sales (Expected units to be sold): \(700,000\) units
• Estimated March 1 inventory (Beginning inventory): \(40,000\) units
• Desired March 31 inventory (Ending inventory): \(25,000\) units

Calculate total units available

Using the Flexible Budgeting knowledge point

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Calculate total units to be produced

Using the Flexible Budgeting knowledge point

• Note: The instructions state to use a minus sign for subtracted or negative numbers.
• Estimated beginning inventory, March 1: \(-40,000\)

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Answer:

Line Item Description	Units
Desired ending inventory, March 31	25,000
Total units available	725,000
Estimated beginning inventory, March 1	-40,000
Total units to be produced in March	685,000