Reference: 07-06
Pardise Company Plans the Following Beginning and Ending

question 14

Multiple Choice

Reference: 07-06
Pardise Company plans the following beginning and ending inventory levels (in units) for July: $$\begin{array} { | l | l | l | } \hline & \text { July 1 } & \text { July 30 } \\\hline \text { Raw material } & 40,000 & 50,000 \\\hline \text { Work in process } & 10,000 & 10,000 \\\hline \text { Finished goods } & 80,000 & 50,000 \\\hline\end{array}$$ Two units of raw material are needed to produce each unit of finished product.
-If Pardise Company plans to sell 480,000 units during July, the number of units it would have to manufacture during July would be:

• A)480,000.
• B)440,000.
• C)510,000.
• D)450,000.

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Definitions:

Potential Loss

Refers to the possible financial loss or damage that might arise from a risk or unfavorable event.

Break-Even Price

The financial point at which an asset needs to be sold for an investor to regain their initial outlay without experiencing any gain or loss.

Put

A options contract that gives the owner the right, but not the obligation, to sell a specific amount of an asset at a predetermined price before a specified date.

Premium

An amount paid over the regular price or the intrinsic value for securities, insurance policies, or other financial products.