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 InventoryRaw material* 41,000 51,000Finished goods 81,000 51,000* Three pounds of raw material are needed to produce each unit of finished product.If Paradise Corporation plans to sell 485,000 units during next year, the number of units it would have to manufacture during the year would be:

Answer 1

Answer:

Production= 455,000 units

Explanation:

Giving the following information:

Beginning Inventory= 81,000

Ending Inventory= 51,000

Sales= 485,000

To calculate the production required for the period, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

Production= 485,000 + 51,000 - 81,000

Production= 455,000 units