Trendsetters, Inc has actual sales for July and August and forecasted sales for
ID: 2419111 • Letter: T
Question
Trendsetters, Inc has actual sales for July and August and forecasted sales for Steptember, October, November , and December as follows:
Actual July 5.900 units
August 6,200 units
Septermber 6,000 units
October 6,800 units
November 5,600 units
Decmeber 6,100 units
a The firm's policy is to hve finished goods inventory on hand at the end of the month that is equal to 70% of the nest month's sales
it is currently estimated that htere will be 2,800 units on hand at the end of August. Calulate the number of units to be produced in each of the months of
Steptember, October, and November.
B Each unit of finished goods product requrie 6.5 pounds of raw marerial. The firm's policy is to have raw material inventory on hand
at the end of the month that equal to 60% of the next month's estimated usage. It is currently estimated that 26,000 pounds of raw material will be on hand at the end of August.
calulate the number of pounds of raw material to be purchased in each of the months of Steptember and October.
Explanation / Answer
Production Budget
( No Of Units)
Particulars
July
Aug
Sep
Oct
Nov
Dec
a)
Opening Stock
2800
4200
4760
3920
b)
Production (b/f)
7400
7360
4760
6450
( C+d-a)
c)
Sales
6200
6000
6800
5600
6100
d)
closing stock
2800
4200
4760
3920
4270
Purchase Budget
( In Pounds)
Particulars
July
Aug
Sep
Oct
Nov
Dec
e)
RM on Hand
26000
29146
18850
25542
f)
RM procured (g+h-e)
51986
38280
g)
RM Required/ to be consumed
48840
48576
31416
42570
(b*6.5 pounds)
h)
RM closing
26000
29146
18850
25542
Production Budget
( No Of Units)
Particulars
July
Aug
Sep
Oct
Nov
Dec
a)
Opening Stock
2800
4200
4760
3920
b)
Production (b/f)
7400
7360
4760
6450
( C+d-a)
c)
Sales
6200
6000
6800
5600
6100
d)
closing stock
2800
4200
4760
3920
4270
Purchase Budget
( In Pounds)
Particulars
July
Aug
Sep
Oct
Nov
Dec
e)
RM on Hand
26000
29146
18850
25542
f)
RM procured (g+h-e)
51986
38280
g)
RM Required/ to be consumed
48840
48576
31416
42570
(b*6.5 pounds)
h)
RM closing
26000
29146
18850
25542
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