Production and sales estimates for March for the Robin Co. are as follows:
| Estimated inventory (units), March 1 | 18,500 |
| Desired inventory (unit), March 31 | 19,800 |
| Expected sales volume (units): | |
| Area M | 6,100 |
| Area L | 9,000 |
| Area O | 7,600 |
| Unit sales price | $18 |
The number of units expected to be manufactured in March is
a.42,500
b.22,700
c.61,000
d.24,000
Production and sales estimates for June are as
follows:
| Estimated inventory (units), June 1 | 8,000 |
| Desired inventory (units), June 30 | 9,000 |
| Expected sales volume (units): | |
| Area X | 4,000 |
| Area Y | 10,000 |
| Area Z | 6,000 |
| Unit sales price | $25 |
The budgeted total sales for June is
a.$500,000
b.$525,000
c.$225,000
d.$200,000
3)
The Cardinal Company had a finished goods inventory of 55,000
units on January 1. Its projected sales for the next four months
were: January - 200,000 units; February - 180,000 units; March -
210,000 units; and April - 230,000 units. The Cardinal Company
wishes to maintain a desired ending finished goods inventory of 20%
of the following months sales.
What is the budgeted units of inventory for March 31?
a.42,000
b.cannot be determined from the data given.
c.36,000
d.46,000
| 1) | Sales | 22700 | (6100 + 9000 + 7600) | |||
| Add: | Desired Ending Inv | 19800 | ||||
| 42500 | ||||||
| Less: | Opening Inventory | 18500 | ||||
| Units to be manu. | 24000 | units | ||||
| 2) | Total budgeted sales = | (4000 + 10000 + 6000) x $ 25 | ||||
| = | $ 500,000.00 | |||||
| 3) | Company wishes to maintain a desired ending finished goods inventory of 20% of the following months sales | |||||
| Therefore, ending inventory of March = | 20% of projected sales of April | |||||
| = | 20% of 230000 units | |||||
| = | 46000 | units | ||||
Production and sales estimates for March for the Robin Co. are as follows: Estimated inventory (units),...