Pardise Company plans the following beginning and ending inventory levels (in units) for July:
$\begin{array} {| l | r | r | }
\hline & \text { July 1 } & \text { July 31 } \
\hline \text { Raw material } & 40,000 & \mathbf { 5 0 , 0 0 0 } \
\hline \text { Work in process } & 10,000 & 10,000 \
\hline \text { Finished goods } & 80,000 & 50,000 \
\hline
\end{array}$Two units of raw material are needed to produce each unit of finished product.

-If 500,000 finished units were to be manufactured during July,what would be the units of raw material needed to be purchased?
A) 900,000 units.
B) 1,000,000 units.
C) 1,010,000 units.
D) 1,020,000 units.

Question

Pardise Company plans the following beginning and ending inventory levels (in units) for July:
$\begin{array} {| l | r | r | } 
\hline & \text { July 1 } & \text { July 31 } \
\hline \text { Raw material } & 40,000 & \mathbf { 5 0 , 0 0 0 } \
\hline \text { Work in process } & 10,000 & 10,000 \
\hline \text { Finished goods } & 80,000 & 50,000 \
\hline
\end{array}$Two units of raw material are needed to produce each unit of finished product.

-If 500,000 finished units were to be manufactured during July,what would be the units of raw material needed to be purchased?
A) 900,000 units.
B) 1,000,000 units.
C) 1,010,000 units.
D) 1,020,000 units.

Quizplus · Accepted Answer

To manufacture 500,000 finished units, 1,000,000 units of raw material are needed (500,000 finished units * 2 units of raw material per finished unit). The company plans to increase its raw material inventory by 10,000 units (from 40,000 to 50,000 units), so the total raw material needed is 1,010,000 units (1,000,000 for production + 10,000 for inventory increase).

Pardise Company Plans the Following Beginning and Ending Inventory Levels