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This is the number of units to be sold. It does not take into account the amount of change in finished goods inventory from the beginning of the year to the end of the year.
The basic inventory formula, which can be used to solve almost any inventory problem, is Beginning Inventory + Produced/Purchased ? Sold/Used = Ending Inventory Whenever you have three of the four numbers, you can always find the fourth number. In this question, we have the number of units in beginning finished goods inventory, the number of units in the ending finished goods inventory, and the number of units to be sold. So the formula to solve for the number of units to be produced (P) is: 900 + P ? 4,000 = 600 Solving for P, we get P = 3,700.
This is the number of units to be sold plus the number of units in ending finished goods inventory. The beginning finished goods inventory must also be a part of the calculation.
This answer results from reversing the beginning and ending finished goods inventories in the calculation.