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
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.
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| 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 |
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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 |
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