The Following Information Is Taken from the Production Budget for the First

question 131

Multiple Choice

The following information is taken from the production budget for the first quarter: $\begin{array} { l r } \text { Beginning inventory in units } & 1,200 \\\text { Sales budgeted for the quarter } & 456,000 \\\text { Production capacity in units } & 472,000\end{array}$ How many finished goods units should be produced during the quarter if the company desires 3200 units available to start the next quarter?

• A)458000
• B)454000
• C)474000
• D)459200

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Definitions:

Target Profit

The specific net income a business intends to reach within a designated timeframe.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Target Costing

A pricing method that involves determining a product's selling price and then subtracting desired profit to arrive at a target production cost.

Target Costing

A pricing strategy where the selling price of a product is determined first, and then the manufacturing cost is managed to meet that target price.