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. Beginning Inventory Ending Inventory Raw material* 47,000 57,000 Finished goods 87,000 57,000 * Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 515,000 units during next year, the number of units it would have to manufacture during the year would be: Multiple Choice
485,000 units
515,000 units
545,000 units
468,000 units

Answer 1

Answer:

485,000 units

Explanation:

The computation of the number of units manufactured is shown below:

= Number of units sold + ending finished goods units - beginning finished goods units

= 515,000 units + 87,000 units - 57,000 units

= 485,000 units

Basically we added the ending finished goods units and deduct the beginning finished goods units to the number of units sold