1.

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 Inventory	Ending Inventory
Raw material*	59,000	69,000
Finished goods	99,000	69,000

*Three pounds of raw material are needed to produce each unit of finished product.

If Paradise Corporation plans to sell 575,000 units during next year, the number of units it would have to manufacture during the year would be:

516,000 units

575,000 units

605,000 units

545,000 units

2.

Arakaki Inc. is working on its cash budget for January. The budgeted beginning cash balance is $15,000. Budgeted cash receipts total $178,000 and budgeted cash disbursements total $177,000. The desired ending cash balance is $43,000. The excess (deficiency) of cash available over disbursements for January will be:

$1,000

$193,000

$14,000

$16,000

3.

LFM Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.9 hours of direct labor at the rate of $25.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.

The budgeted direct labor cost per unit of Product WZ would be:

$41.70 per unit

$6.80 per unit

$72.50 per unit

$25.00 per unit