QUESTION 4 Mate Boomerang Corporation manufactures and sells plastic boomerangs.

Question

QUESTION 4 Mate Boomerang Corporation manufactures and sells plastic boomerangs. Expected boomerang sales (in units) for the upcoming months are as follows: July Aug. Sept. Oct. Nov. Dec. 10,000 | 14,00? 18,0001 1 1 ,000| 17,000| 11,000 Budgeted unit sales Mate likes to maintain a finished goods inventory equal to 10% of the next month's estimated sales. Seven ounces of plastic resin are needed to produce every boomerang. Mate likes to have enough plastic resin on hand at the end of the month to cover 32% of the next month's production requirements. How many ounces of plastic resin should Mate plan on purchasing in the month of October? Round your final answer to the nearest integer

Explanation / Answer

October production = 11000 + (17000* 10%) - (11000 * 10%)

= 11000 + 1700 - 1100 = 11600 units

November production = 17000 + (11000 * 10%) - (17000 * 10%)

= 17000 + 1100 - 1700 = 16400 units

October production resin needs = 11600 * 7 = 81200 ounces

November production resin needs = 16400 * 7 = 114800 ounces

October resin purchases = 81200 + ( 114800 * 32%) - (81200 * 32%)

= 81200 + 36736 - 25984 = 91952 ounces

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