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* 58,000 68,000 Finished goods 98,000 68,000 *Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 570,000 units during next year, the number of units it would have to manufacture during the year would be:

Answer 1

Answer:

540,000 units

Explanation:

Budgeted Production Units:

= Budgeted Sale Units +  Ending Inventory of Finished Goods - Beginning Inventory of Finished Goods

= 570,000 units + 68,000 units - 98,000 units

= 540,000 units

Therefore, the number of units Paradise Corporation would have to manufacture during the year would be 540,000 Units.