Paradise Corporation budgets on an annual basis for its fiscal year. The followi

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 Ending Inventory Inventory Raw material Finished goods 30,000 70,oo0 40,000 60,000 Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 510,000 units during next year, the number of units it would have to manufacture during the year would be Multiple Choice 500,000 units 520,000 units 510,000 units 570,000 units

Explanation / Answer

Answer is A. 500,000 units

Budgeted sales for the year    510,000 Add: Ending finished goods inventory      60,000 Less: Beginning finished goods inventory    (70,000) Units to be manufactured    500,000

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