Answer:
Explanation:
Sales budget
$Revenue Unit
January 176,000 80,000
February 110,000 50,000
March 88,000 40,000
April 101,200 46,000
Ending inventory = 25% of next month sales
Ending inventory in December = 25% of next month sales.
Opening inventory in January = 33,000 units
January (80000-33000)+25% *50000 = 59,500 units
February = (50000 -12500) + 25%*40000 = 47,500 units
March = (40,000-10,000) +25%*46,000 = 41,500 units
April =46000-11,500= 34,500 units
Raw materials Peanut Jars
January 59,500 * 24 1,428,000 59,500
February 47,500*24 1,140,000 47,500
March 41,500 *24 996,000 41,500
April 34,500 *24 828,000 34,500
Company policy for production requires that ending inventory is 20% of next month production
Peanut production
January 1428000 + (20%* 1140000) = 1,656,000
February = (1140000-228000) + (20%*996,000) = 1,111,200
March = (996,000-199,200 ) + (20% * 828,000) =962,400
April 828,000- 165,500 = 662,400
Total peanut production = 4,392,000
Jars production
January = 59500 + (20% * 47,500)= 69,000
February = (47,500-9500) + (20% * 41,500) = 46,300
March = (41,500 - 8,300) + (20% * 34,500) 40,100
April = 34,500-6900 =27600
Total = 183,000
