Answer:
Instructions are listed below.
Explanation:
Giving the following information:
The company expects to sell 520 units in May and 650 units in June. Beginning and ending finished goods for May is expected to be 180 and 145 units, respectively. June’s ending finished goods are expected to be 155 units. Each unit requires 3 wheels at a cost of $22 per wheel. Becker requires 20 percent of next month’s material production needs on hand each month. July’s production units are expected to be 620 units.
May:
Sales= 520*3= 1,560
Ending inventory= 145* 3 + (650*3*0.20)= 825
Beginning inventory= 180*3= (540)
Total= 1,845 wheels
Total cost= 1,845*22= $40,590
June=
Sales= 650*3= 1,950
Ending inventory= (155*3) + (620*3*0.20)= 837
Beginning inventory= (825)
Total= 1,962
Total cost= 1,962*22= $43,164
