Question

Roberts Corporation manufactures home cleaning products. One of the products, Quickclean, requires 2 pounds of Material A and 5 pounds of Material B per unit manufactured. Material A is purchased from the supplier for $0.30 per pound and Material B is purchased for $0.50 per pound. The finished goods inventory on hand at the end of each month should equal 4,000 units plus 25% of the next month's sales. The raw materials inventory on hand at the end of each month (for either Material A or Material B) should equal 80% of the following month's production needs. The production budget calls for 26,000 units of Quickclean to be manufactured in June and 32,000 units of Quickclean to be manufactured in July. On May 31 there will be 41,600 pounds of Material A and 104,000 pounds of Material B in inventory. Assume that on January 1 the inventory of Quickclean was 8,000 units. Expected sales in January are 14,000 units and expected sales in February are 18,000 units. The number of units needed to be produced in January would be:

Answer 1

Answer:

Total production= 14,500 units

Explanation:

Giving the following information:

The finished goods inventory on hand at the end of each month should equal 4,000 units plus 25% of the next month's sales.

The expected sales in January are 14,000 units and expected sales in February are 18,000 units.

Assume that on January 1 the inventory of Quickclean was 8,000 units.

Production for January:

Sales= 14,000

Ending inventory= 4,000 + (18,000*0.25)= 8,500

Beginning inventory= (8,000)

Total production= 14,500