To Determine How Many Units to Produce in a Period

question 3

Multiple Choice

To determine how many units to produce in a period for the production budget,you would use all of the following except:

• A)the number of units in beginning finished goods inventory.
• B)the number of units in beginning raw materials inventory.
• C)the expected sales in units.
• D)the desired number of units in ending finished goods inventory.
• E)None of the answer choices is correct.

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Definitions:

Carrying Costs

Expenses associated with holding or storing inventory, including warehousing, insurance, tax, and depreciation.

Shortage Costs

The costs associated with not having enough inventory on hand, which can include lost sales and customer dissatisfaction.