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* 51,000 61,000 Finished goods 91,000 61,000 * Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 535,000 units during next year, the number of units it would have to manufacture during the year would be:

Answer 1

505,000 units

Step-by-step explanation:

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

Beginning inventory + Units produced = Ending inventory + Units sold

Units produced = Ending inventory + Units sold - Beginning inventory

Units produced = 535,000 units + 61,000 units - 91,000 units

Units produced = 505,000 units