Question

The Volt Battery Company has forecast its sales in units as follows: January 2,900 February 2,750 March 2,700 April 3,200 May 3,450 June 3,600 July 3,300 Volt Battery always keeps an ending inventory equal to 110 percent of the next month’s expected sales. The ending inventory for December (January’s beginning inventory) is 3,190 units, which is consistent with this policy. Materials cost $12 per unit and are paid for in the month after purchase. Labor cost is $5 per unit and is paid in the month the cost is incurred. Overhead costs are $16,500 per month. Interest of $10,100 is scheduled to be paid in March, and employee bonuses of $15,300 will be paid in June. a. Prepare a monthly production schedule for January through June.

Answer 1

Answer:

(the image attached) for the monthly production budget for january through June

Explanation:

1st We will list each month sales

Then, we will calcualte the desired ending inventory as 110% of next month sales:

february sales 2,750

So, January ending inventory: 2,750 x 1.10 = 3,025

And so on with all the months.

Then we subtract the beginning inventory as those units are already produced/ in company's stocks

Giving as a result the units to be produced.