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

Paradise Corporation must manufacture 540,000 units during the next fiscal year to satisfy the planned sales and inventory levels, which includes ending inventory and subtracts the beginning inventory from the planned sales.

Step-by-step explanation:

The question involves Paradise Corporation and their intent to budget for the next fiscal year. To determine the number of units Paradise Corporation must manufacture, we consider the planned sales, and beginning and ending inventories. The calculation to find out the number of units needed for production is:

Planned sales for next year

Plus ending inventory

Minus beginning inventory

The formula applied is as follows: Units to Manufacture = (Planned Sales + Ending Inventory - Beginning Inventory).

Here, we have:

Planned Sales for next year = 570,000 units

Ending Inventory of Finished Goods = 68,000 units

Beginning Inventory of Finished Goods = 98,000 units

Thus, the number of units to be manufactured is:

Units to Manufacture = (570,000 + 68,000 - 98,000) = 540,000 units

Paradise Corporation would have to manufacture 540,000 units during the next year to meet its planned sales and inventory levels.

Answer 2

540,000 units

Step-by-step 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.