Graphix, Inc., makes a special line of graphic tubing items. For each of the next two years.

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Graphix, Inc., makes a special line of graphic tubing items. For each of the next two years. Years 5 and 6, the company expects to sell 160,000 units. The beginning finished goods inventory, at the start of Year 5, has 40,000 units. However, the target ending finished goods inventory for each year is 20,000 units.

Each unit requires five feet of plastic tubing. At the beginning of Year 5, there are 100,000 feet of plastic tubing in inventory. Management has set a target of tubing materials on hand equal to three months' production requirements. Sales and production take place evenly throughout the year.

Compute the total targeted production of the finished product for Year 5. Compute the required purchases of tubing materials for Year 5. (Note that production in Year 6 should be 160,000 units of the finished product.)

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Cost Accounting

ISBN: 9780256257113

4th Edition

Authors: Michael W. Maher, Edward B. Deakin

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