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* 55,000 65,000 Finished goods 95,000 65,000 * Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 555,000 units during next year, the number of units it would have to manufacture during the year would be_____________.

Answer 1

Answer:

525,000 units

Explanation:

Given that,

Number of units plans to sell during next year = 555,000 units

Ending Inventory of Finished Goods = 65,000 units

Beginning Inventory of Finished Goods = 95,000 units

Number of units it would have to manufacture during the year:

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

= 555,000 units + 65,000 units - 95,000 units

= 525,000 units