Pardise Company Plans the Following Beginning and Ending Inventory Levels

question 48

Multiple Choice

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 Pardise Company plans to sell 480,000 units during July,what would be the number of units it would have to manufacture during July?

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

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Definitions:

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where demand equals supply.

Decrease in Price

A reduction in the cost at which goods or services are sold, often leading to increased demand.

Increase in Quantity

A rise in the amount of goods or services produced or supplied.

Market Equilibrium

The state in which market supply and demand balance each other, leading to stable prices.