Gentry Company produces speaker systems for trucks. Estimated sales (in units) i

Question

Gentry Company produces speaker systems for trucks. Estimated sales (in units) in January are 20,000; in February 25,000; and in March 22,000. Each unit is priced at $45. Gentry wants to have 25% of the following month's sales in ending inventory. That requirement was met on January 1.

Each speaker system requires 2 boxes and 10 yards of wire. Boxes cost $5 each and wire is $0.90 per yard. Gentry wants to have 30% of the following month's production needs in ending raw materials inventory. On January 1, Gentry had 9,000 boxes and 100,000 yards of wire in inventory.

How many boxes does Gentry expect to purchase in January?

Explanation / Answer

Ans:

48,050

WHY?

30% of 20,000 = 6,000
30% of 25,000 = 7,500
30% of 22,000 = 6,600

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