Question

ABC Co. provides the following sales forecast for the next four months: April May June July Sales (units) 590 670 620 710 The company wants to end each month with ending finished goods inventory equal to 40% of next month's forecasted sales. Finished goods inventory on April 1 is 236 units. Assume July's budgeted production is 620 units. In addition, each finished unit requires six pounds (lbs.) of raw materials and the company wants to end each month with raw materials inventory equal to 20% of next month’s production needs. Beginning raw materials inventory for April was 746 pounds. Assume direct materials cost $4 per pound. Prepare a production budget for the months of April, May, and June.

Answer 1

I think the answer will be 0.2%