Question

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Beginning Inventory Ending Inventory Finished goods (units) 31,000 41,000 Raw material (grams) 61,000 51,000 Each unit of finished goods requires 3 grams of raw material. The company plans to sell 260,000 units during the year. The number of units the company would have to manufacture during the year would be:

Answer 1

270,000 units

Step-by-step explanation:

Given that:

Beginning Inventory for finished goods: 31,000

Ending Inventory for finished goods : 41,000

Beginning Inventory for raw materials: 61000

Ending Inventory for raw materials: 51,000

Units planned to be sold: 260,000

We compute the produced finished goods = Ending inventory + Units sold − Beginning inventory

= 41,000 + 260,000 − 31,000 = 270,000

The number of units the company would have to manufacture during the year would be 270,000