Why might this companys target level of steel inventory be

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Reference no: EM13482233

A company produces doors. The following information wasgathered to prepare budgets for the upcoming year beginning January1:

sales forecast inunits................................... 5,500 doors

finished goods inventory,Jan1....................... 620 doors

target finished goods inventory,Dec1............. 480 doors

raw materials inventory-steel, Jan1................ 40,000lbs

targetinventory-steel,Dec1.......................... 80,000lbs

raw materialsinventory-glass,Jan1.................. 6,000 squarefeet

target inventory-glass,Dec1............................ 4,000square feet

budgeted purchase price-steel......................... $4 perlb

budgeted purchase price-glass.........................$2 persquare foot

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

Why might this company's target level of steel inventory be higher than last year's ending balance and its target level of glass inventory be lower than last year's ending balance?

Reference no: EM13482233

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