2. All Sports sells canvas gear bags for $34 each. budgeted sales amounts for th

Question

2. All Sports sells canvas gear bags for $34 each. budgeted sales amounts for the first 3 months of 2018 appear below: projected sales for january 26,000 units, february 25,000 units, march 24,000 units. all sports wants to have enough canvas on hand at the end of each month equal to 15% of the following month's production material needs, along with 10% of the next month's budgeted unit bag sales. each bag requires 3.25 yards of canvas. show the calculations of how many gear bags that All Aports should produce during february. circle your answer

Explanation / Answer

Answer: All Sports should produce 24,900 gear bags during February.

January February March Budgeted sales (units) 26000 25000 24000 Desired ending finished goods inventory as percent of next month's budgeted unit sales 10% 10% 10% Ending finished goods inventory 2500 2400 Total required production 28500 27400 Less: Beginning finished goods inventory 2500 Budgeted Production 24900

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