Question

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.
Beginning Ending
Inventory Inventory
Finished goods (units) 31,000 81,000
Raw material (grams) 61,000 51,000
Each unit of finished goods requires 2 grams of raw material. The company plans to sell 780,000 units during the year. The number of units the company would have to manufacture during the year would be: _________

Answer 1

Answer:

Production 830,000

Explanation:

$Beginning Inventory + Purchase = Ending Inventory + COGS$

- FG(units)

Beginning 31,000

Ending 81,000

Sales 780,000

Production 830,000

sales + ending - beginning = production

We are asked for the finished good units to produce.

The raw materials are irrelevant in this question.