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* 56,000 66,000 Finished goods 96,000 66,000Three pounds of raw material are needed to produce each unit of finished product.If Paradise Corporation plans to sell 560,000 units during next year, the number of units it would have to manufacture during the year would be:a) 504,000 unitsb) 560,000 unitsc) 590,000 unitsd) 530,000 units

Answer 1

Answer:

Production= 530,000 units

Explanation:

Giving the following information:

Beginning Inventory= 96,000

Ending Inventory= 66,000

Sales= 560,000 units

To calculate the production required, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

Production= 560,000 + 66,000 - 96,000

Production= 530,000 units