Giants Manufacturing has a current production capacity of 15,000 units per week assuming no overtime is worked.
Question:
Giants Manufacturing has a current production capacity of 15,000 units per week assuming no overtime is worked. The production budget for the next six weeks is shown below.
| | Week 1 | Week 2 | Week 3 | Week 4 | Week 5 | Week 6 |
| Budgeted unit sales | 16,000 | 15,000 | 12,000 | 14,000 | 17,000 | 10,000 |
+ | Desired ending inventory units | 1,500 | 1,200 | 1,400 | 1,700 | 1,000 | 1,000 |
= | Units required | 17,500 | 16,200 | 13,400 | 15,700 | 18,000 | 11,000 |
- | Beginning inventory units | 2,500 | 1,500 | 1,200 | 1,400 | 1,700 | 1,000 |
= | Budgeted production units | 15,000 | 14,700 | 12,200 | 14,300 | 16,300 | 10,000 |
| | | | | | | |
Which of the following actions would not be an appropriate response to this budget information?
A) Produce 12,800 units in Week 3, 15,000 units in Week 4, and 15,000 units in Week 5
B) Produce 15,000 units in Week 5 and 11,300 units in Week 6
C) Use overtime to produce 1,300 units in Week 5
D) Outsource production of 1,300 units in Week 5
Business
ISBN: 978-0324829556
10th Edition
Authors: Willian M Pride, Robert J. Hughes, Jack R Kapoor