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MAXImum [283]
3 years ago
9

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are p

lanned for the year. Beginning Inventory Ending Inventory Finished goods (units) 26,000 76,000 Raw material (grams) 56,000 46,000 Each unit of finished goods requires 2 grams of raw material. The company plans to sell 730,000 units during the year. The number of units the company would have to manufacture during the year would be
Business
1 answer:
PilotLPTM [1.2K]3 years ago
8 0

Answer:

The number of units the company would have to manufacture during the year would be 780,000 units

Explanation:

To find out how much purchase is made, first we have to calculate the production level. The equation for production level is shown below:

Production level = Closing stock of finished goods + Sales - Opening stock of finished goods

= 76,000 + 730,000 - 26,000

= 780,000 units

Rest cost like opening and ending balance of raw material , required gram is irrelevant for computation part. Thus, it is not considered.

Hence, The number of units the company would have to manufacture during the year would be 780,000 units

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