Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending...
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* | 54,000 | 64,000 | |||||
| Finished goods | 94,000 | 64,000 | |||||
* Three pounds of raw material are needed to produce each unit of finished product.
If Paradise Corporation plans to sell 550,000 units during next year, the number of units it would have to manufacture during the year would be:
Homework Answers
Units needed to be manufactured
= Sales needed + desired ending inventory - Beginning inventory
= 550,000 + 64,000 - 94,000
= 520,000
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