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The Ace Battery Company has forecast its sales in units as follows:
January1,300
May1,850
February1,150
June2,000
March1,100
July1,700
April1,600
Ace always keeps an ending inventory equal to 110 percent of the next month's expected sales. The ending inventory for December (January's beginning inventory) is 1,430 units, which is consistent with this policy.
Materials cost $14 per unit and are paid for in the month after production. Labour cost is $7 per unit and is paid in the month the cost is incurred. Overhead costs are $8,500 per month. Interest of $8,500 is scheduled to be paid in March, and employee bonuses of $13,700 will be paid in June.
Problem a. Prepare a monthly production schedule for January through June.
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