Paradise Corporation budgets on an annual basis for its fiscal year. The followi
ID: 2456982 • Letter: P
Question
Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels ( in units) are planned for next year.
Raw Materials Beg Inv =54,000
Raw Materials End Inv = 64,000
Finished Goods Beg Inv = 94,000
Finished Goods End Inv = 64,000
*Three pounds of raw material are needed to produce each unit of finished product.
If Paradise Corporation plans to sell 550,000 units during next year, the number of units it would have to manufacture during the year would be:
A. 496,000 Units
B. 550,000 Units
C. 580,000 Units
D. 520,000 Units
Explanation / Answer
The number of units it would have to manufacture during the year would be
= Sales + Closing stock of finished goods – Opening inventory of finished goods
= 550000 + 64000 – 94000
= 520000
Conclusion:- The Right answer is D) 520000 unit.
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