Sarter Corporation is in the process of preparing its annual budget. The followi

Question

Sarter 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) 30,000 80,000 Raw material (grams) 60,000 50,000 Each unit of finished goods requires 2 grams of raw material. If the company plans to sell 650,000 units during the year, the number of units the company would have to manufacture during the year would be: 700,000 units 650,000 units 590,000 units 730,000 units

Explanation / Answer

No of units to be manufacture Sales 650000 Add: Ending Inventory 80000 Less: Beginning Inventory -30000 Units Manufacture 700000 The correct answer is A. 700000 Units

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