7. 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* 50,000 60,000 Finished goods 90,000 60,000 *Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 530,000 units during next year, the number of units it would have to manufacture during the year would be:

480,000 units

560,000 units

530,000 units

500,000 units

5.

Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

	Sales are budgeted at $270,000 for November, $280,000 for December, and $280,000 for January.
	Collections are expected to be 85% in the month of sale, 12% in the month following the sale, and 3% uncollectible.
	The cost of goods sold is 80% of sales.
	The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
	Other monthly expenses to be paid in cash are $21,200.
	Monthly depreciation is $18,400.
	Ignore taxes.

Balance Sheet
October 31
Assets
Cash	$46,000
Accounts receivable, net of allowance for uncollectible accounts	94,000
Merchandise inventory	151,200
Property, plant and equipment, net of $622,000 accumulated depreciation	1,260,000
Total assets	$1,551,200
Liabilities and Stockholders' Equity
Accounts payable	$356,450
Common stock	820,000
Retained earnings	374,750
Total liabilities and stockholders' equity	$1,551,200

The cost of December merchandise purchases would be:

A $94,000

B $156,800

C $224,000

D $46,000