Reference no: EM132916440
Question - The PurplePumpkin manufactures and distributes holiday wreaths. Each wreath requires 4 feet of material to produce. The company is now planning the raw materials it needs to produce its goods for the third? quarter, the company in which their peak sales occur. To keep production and sales moving? smoothly, the company now has the following inventory requirements.
1. The finished goods inventory on hand at the end of each month must be equal to 2,825 units of inventory plus 20?% of next? month's sales. That is what they have on hand at the end of June.
2. The raw materials inventory on hand at the end of each month must be equal to 48?% of the following? month's production needs for raw materials. That is what they have on hand at the end of June.
3. The company maintains no? work-in-process inventories.
4. The sales budget for the final six months of the year is as? follows:
Budgeted Sales In Units
July: 35,180 units
August: 39,570 units
September: 50,619 units
October: 30,083 units
November: 20,339 units
December: 10,119 units
Required -
a. How many units should the firm produce during the month of JULY??
b. How many units should the firm produce during the month of AUGUST??
c. How many feet of material should the firm have in raw materials ending inventory at the end of JUNE??
d. How many feet of material should the firm have in raw materials ending inventory at the end of JULY??
e. How much direct materials? (in feet) will need to be purchased in JULY??