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    skillet's Avatar
    skillet Posts: 3, Reputation: 1
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    #1

    Mar 4, 2006, 05:37 PM
    Managerial accounting
    [B]production & purchase budgets[/B]

    Actual:
    May 5900 units
    June 6200

    Forecast:
    July 6000
    August 6800
    Sept 5600
    October 5300

    Question:
    The firm's policy is to have finished goods inventory on hand at the end of the month that is equal to 70 % of the next month's sales. They estimated 4000 units on hand at the end of June.

    Thank you
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Mar 4, 2006, 06:12 PM
    Quote Originally Posted by skillet
    [B]production & purchase budgets[/B]

    actual:
    may 5900 units
    june 6200

    forecast:
    july 6000
    august 6800
    sept 5600
    october 5300

    question:
    the firm's policy is to have finished goods inventory on hand at the end of the month that is equal to 70 % of the next month's sales. they estimated 4000 units on hand at the end of june.

    thank you
    And the question is?
    skillet's Avatar
    skillet Posts: 3, Reputation: 1
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    #3

    Mar 5, 2006, 07:37 AM
    Quote Originally Posted by CaptainForest
    and the question is?
    Sorry, the question is this , I need to know the number of units to be produced in each months of July,August and September.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #4

    Mar 5, 2006, 12:55 PM
    Quote Originally Posted by skillet
    actual:
    may 5900 units
    june 6200

    forecast:
    july 6000
    august 6800
    sept 5600
    october 5300
    Are these sales numbers?
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #5

    Mar 5, 2006, 01:01 PM
    Assuming those are sales number/month:

    Month-> Sales---> Units at end of month
    June------------> 4000----------------->production=end+sales-beg
    July----> 6000---> 4760----------------->6760
    Aug----> 6800---> 3920----------------->5960
    Sept--->5600---> 3710----------------->5390
    Oct----> 5300--->

    Therefore,
    In July 6760 units should be produced
    In Aug 5960 units should be produced
    In Sept 5390 units should be produced
    skillet's Avatar
    skillet Posts: 3, Reputation: 1
    New Member
    		  
    #6

    Mar 5, 2006, 05:00 PM
    Quote Originally Posted by CaptainForest
    Assuming those are sales number/month:

    Month-> Sales---> Units at end of month
    June------------> 4000----------------->production=end+sales-beg
    July----> 6000---> 4760----------------->6760
    Aug----> 6800---> 3920----------------->5960
    Sept--->5600---> 3710----------------->5390
    Oct----> 5300--->

    Therefore,
    In July 6760 units should be produced
    In Aug 5960 units should be produced
    In Sept 5390 units should be produced
    Thank you
    Second part of this question is this.
    Each unit of finished product requires 6.5 pounds of raw material. They want raw material inventory on hand at the end of each month that is equal to 60% of the next month's estimated usage. 26000 pounds of raw material will be on hand at the end of June.
    Calculate the number of pounds of raw materials to be purshased for July and August?
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