1a)

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*	60,600	62,500
Finished goods	89,600	55,800

* Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 514,000 units during next year, the number of units it would have to manufacture during the year would be:

470,200 units

510,200 units

540,200 units

480,200 units

1b)

Shocker Corporation's sales budget shows quarterly sales for the next year as follows: Unit sales

Quarter 1	11,900 units
Quarter 2	10,700 units
Quarter 3	19,200 units
Quarter 4	18,700 units

Corporation policy is to have a finished goods inventory at the end of each quarter equal to 20% of the next quarter's sales. Budgeted production for the second quarter of the next year would be:

9,000 units

10,700 units

12,400 units

12,000 units