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Wynn Inc. manufactures beanies. The budgeted units to be produced and sold are below
Expected Production Expected Sales
August 3,500 2,900
September 2,800 3,900
It takes 18 yards of yarn to produce a beanie. The company's policy is to maintain yarn at the end of each month equal to 5% of next month's production needs and to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated production needs. The cost of yarn is P0.20 a yard. At August 1, 3,150 yards of yarn were on hand.
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