CIMA BA2 · Chapter 6 · Question 3 of 13
Budgeted sales for March are 18,000 units and for April 20,000 units. Opening inventory of finished goods at 1 March is expected to be 2,400 units. Closing inventory each month is to be 15% of the following month's budgeted sales. What is the production budget for March?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) 18,600 units
Explanation
Closing inventory for March = 15% x 20,000 = 3,000 units. Production = sales + closing inventory - opening inventory = 18,000 + 3,000 - 2,400 = 18,600 units.
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