7. Sarter Corporation is in the process of preparing lts annual budget. The foll

Question

7. Sarter Corporation is in the process of preparing lts annual budget. The following beginning and ending inventory levels are planned for the year. Beginning Inventory Ending Inventory 21,000 51,000 Finished goods (units) 71,000 Raw material (grams) Each unit of finished goods requires 2 grams of raw material. If the company plans to sell 560,000 units during the year, the number of units the company would have to manufacture during the year would be: O 610,000 units O 631,000 units O 560,000 units O 509,000 units

Explanation / Answer

The number units the company would have to manufacture = Ending inventory + Unit sales - Beginning Inventory.

= 71000 + 560000 - 21000

= 610000 units.

Therefore, the right answer is option (a) 610000 units

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