7. Paradise Corporation budgets on an annual basis for its fiscal year. The foll
ID: 2488628 • Letter: 7
Question
7. 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. Beginning Inventory Ending Inventory Raw material* 50,000 60,000 Finished goods 90,000 60,000 *Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 530,000 units during next year, the number of units it would have to manufacture during the year would be:
480,000 units
560,000 units
530,000 units
500,000 units
5.
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
Sales are budgeted at $270,000 for November, $280,000 for December, and $280,000 for January.
Collections are expected to be 85% in the month of sale, 12% in the month following the sale, and 3% uncollectible.
The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
The cost of December merchandise purchases would be:
A $94,000
B $156,800
C $224,000
D $46,000
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
Explanation / Answer
7) Answer: 500000 units
5) Answer: C $224,000
Number of units budgeted to be sold 530000 Add: Ending inventory of finished goods 60000 Total requirement 590000 Less: Beginning inventory of finished goods 90000 Number of units to be manufactured 500000Related Questions
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