If the beginning finished goods inventory (in units) is more than the desired finished goods ending inventory (in units), the required production in units will be: Select one: a. Equal to unit sales plus beginning finished good inventory (in units) b. More than unit sales c. Less than unit sales d. Equal to unit sales

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A: Option no. (b) is correct.

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.