Given a beginning inventory of $40,000, total sales of $225,000, and an ending inventory of $30,000, what is the total production amount?

Multiple choice question for Capacity Analysis and Inventory Costing. Select an option, then review the explanation below.

Explanation

Total production is calculated by adding the cost of goods sold (which equals total revenue minus ending inventory) to the beginning inventory. Here, production = $40,000 + ($225,000 + $30,000) - $40,000 = $235,000.

Practice related questions from the same subject.

1.What term describes the operational capacity that is below the theoretical maximum capacity?
2.Under the Variable Costing approach, how are fixed manufacturing overhead costs handled during the accounting period?
3.What does the denominator represent in the fixed manufacturing cost rate calculation?
4.Which of the following is used to determine product capacity, cost analysis, performance assessment, and compliance with regulations?
5.In absorption costing, which format does the income statement typically use?

Given a beginning inventory of $40,000, total sales of $225,000, and an ending inventory of $30,000, what is the total production amount?

Explanation

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