hello, i would like assistance with the following... a.The finished goods invent
ID: 2346050 • Letter: H
Question
hello,
i would like assistance with the following...
a.The finished goods inventory on hand at the end of each month must be equal to 14,000 units of Supermix plus 20% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 19,500 units.
b.The raw materials inventory on hand at the end of each month must be equal to one-half of the following month's production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 97,500 cc of solvent H300.
c.The company maintains no work in process inventories.
A sales budget for Supermix for the last six months of the year follows.
Budgeted Sales in Units
July 38,000
August 32,500
September 53,000
October 3,000
November 23,000
December 13,000
I need to know how to prepare a production budget for Supermix for the months July, August, September, and October.
I have the following and do not believe i am on the right track. below are the numbers i came up with. please advise.
July
Budgeted sales 38000
Desired ending inventory 19500
Total needs 76000 (20% of 38000)
Beginning inventory 14000
Required production 24000
would this be correct? tnx
Explanation / Answer
July Aug. Sept. Oct. Nov. Dec.
Sales 38,000 32,500 53,000 3,000 23,000 13,000
Ending Inv.1 20,500 24,600 14,600 18,600 16,600 Jan sales ?
FG inv.Req. 58,500 57,100 67,600 21,600 39,600
Beg. Inv. 19,500 20,500 24,600 14,600 18,600 16,600
Prod. reqd. 39,000 36,600 43,000 7,000 21,000
1July Ending inventory 14,000 + (32,500 x 20%) = 20,500
August Ending inventory 14,000 + (53,000 x 20%) = 24,600
September Ending inventory 14,000 + (3,000 x 20%) = 14,600
October Ending inventory 14,000 + (23,000 x 20%) = 18,600
November Ending inventory 14,000 + (13,000 x 20%) = 16,600
December Ending inventory 14,000 + (Jan Sales x 20%) = ?
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