Olympia Productions, Inc., makes award medallions that are attached to ribbons.

Question

Olympia Productions, Inc., makes award medallions that are attached to ribbons. Each medallion requires 18 inches of ribbon. The sales forecast for February is 2,300 medallions. Estimated beginning inventories and desired ending inventories for February are as follows: (Assume 18 inches 0.5 yards) Estimated Ending Inventory Beginning Inventory 1,100 Medallions Ribbon (yards) 700 27 70 Required a. Calculate the number of medallions to be produced in February. r of medallions produced b. Calculate the number of yards of ribbon to be purchased in February. ber of yards of ri bbon

Explanation / Answer

a. = 1,900 medallions Production =Closing Inventory + Projected Sales - Opening = 700 + 2,300 -1,100 = 1,900 medalions b. = 907 yards Purchases =Closing Inventory + Projected Consumption - Opening inventory = 27 + (1,900* 0.5) - 70 = 907 yards

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