Inventory Management and Desired Ending Inventory Calculation

What is the desired number of units in ending finished goods?

Desired units in ending finished goods would be 1500. Both the raw materials used in production and the finished commodities that are offered for sale are included in the definition of inventory. Thus, option B is correct.

Answer:

Desired units in ending finished goods would be 1500.

Inventory is one of a company's most important assets since it is a major source of revenue generation and, as a result, a source of profit for the shareholders of the business.

The calculation of desired units is provided below:

Desired Ending inventory units = Beginning inventory units + Required production units - Expected unit sales.

Beginning inventory units = 5000

Add: Required production units = 43500

Units available for sale = 48500

Less: Expected unit sales = 47000

Desired units in ending finished goods = 1500

Desired units in ending finished goods would be 1500.

The three basic types of inventory are finished goods, ongoing projects, and raw resources. It appears as a current asset on a corporation's balance sheet. A vital asset for every firm is inventory. It is defined as the variety of finished goods or raw materials that a business keeps on hand for regular business activities.

Therefore, after the above calculations option B is the ideal selection.