Why might safe lsquon blights target level ofsteel

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Reference no: EM13481892

Safe' n' Bright, inc., produces outside doors forinstallation on homes. The following information was gathered to prepare budgets for the upcoming year beginning January 1:

Sales forecast inunits...............................................................5,500doors

Finished goods inventory, Jan.1...................................................620doors

Target finished goods inventory, Dec.31.......................................480doors

Raw materials inventory-steel, Jan1..........................................40,000pounds

Target inventory-steel, Dec.31................................................80,000pounds

Raw materials inventory-glass, Jan.1.......................................6,000square feet

Target inventory-glass, Dec.31.............................................4,000square feet

Budgeted purchaseprice-steel................................................$4per pound

Budgeted purchaseprice-glass.............................................$2per square foot

The manufacture of each door requires 20 pounds of steel and 6square feet of glass.

1) Prepare the production schedule in units for safe‘n' Bright.

2) Using the production schedule, develop the direct materialspurchase budgets for steel and glass.

3) Why might safe ‘n' Blight's target level ofsteel inventory be higher than last year's ending balance and its target level of glass inventory be lower than last year'sending balance?

Reference no: EM13481892

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