Alder Company budgets on an annual basis. The following beginning and ending inv

Question

Alder Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are planned for the next year. Two units of raw material are required to produce each unit of finished product.

If Alder Company plans to sell 470,000 units during the year, compute the number of units the firm would have to manufacture during the year.

Alder Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are planned for the next year. Two units of raw material are required to produce each unit of finished product.

Explanation / Answer

the number of units the firm would have to manufacture during the year

= Sales + Ending inventory - Beginning inventory

=470000+72000-86000

=456000 units

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