Motorcycle Manufacturers, Inc., projected sales of 57,400 machines for the year. The estimated January 1 inventory is 6,890 units, and the desired December 31 inventory is 7,240 units. The budgeted production for the year is?

57,750 units

Explanation:

The budgeted production for the year is a factor of the opening inventory balance, the projected sales for the year and the desired closing inventory value. The relation between all items is as shown below;

Opening inventory balance + budgeted production - sales = closing inventory balance

Given projected sales of 57,400 machines for the year. The estimated January 1 inventory is 6,890 units, and the desired December 31 inventory is 7,240 units.

let the budgeted production be k

6,890 + k - 57,400 = 7,240

k = 7,240 + 57,400 - 6,890

k = 57,750 units

The budgeted production for the year is 57,750 units