Question

Question 2
Inventory of finished goods at beginning	20,000
Inventory of finished goods at end	25,000
Cost per unit of finished goods from supplier XYZ	$100
Total cost of finished goods from supplier XYZ	$24,000
Sales price per unit	$150
Total revenue from sales	$1,500,000
Given the information above, calculate the units produced during the year.
	Calculations
Opening FG
Closing FG
Purchases
Units Sold
Units Produced

Answer 1

Let us first see what information we have from the question -

Opening Inventory of Finished Goods(in units) = 20,000

Closing Inventory of Finished Goods(in units) = 25,000

Goods purchased from Supplier XYZ = $24,000 where unit price paid per unit is $100, So units purchased from supplier would be $24,000 / $100 = 240 units were purchased from supplier XYZ.

Total Revenue from Sales = $1,500,000 where selling price per unit is $150 per unit.

So Units sold = $1,500,000 / $150 = 10,000 units were sold during the year.

As per standard formula, Sales = Opening Inventory + Purchases + Units Produced(Manufactured) - Closing Inventory

Using the above formula to calculate the Units produced during the year -

10,000 = 20,000 + 240 + Units Produced - 25,000

Units Produced = 14,760 units.

So 14,760 units were produced during the year.

Description	Inventory(in units)
Opening FG	20,000
Closing FG	25,000
Purchases	240
Units Sold	10,000
Units Produced	14,760

Hope it is clear.

Thank you