Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming ?ve months follow:

January 40,000

February 50,000

March 60,000

April 60,000

May 62,000

The following data pertain to production policies and manufacturing speci?cations followed by

Allison Manufacturing:

a. Finished goods inventory on January 1 is 32,000 units, each costing $166.06. The desired

ending inventory for each month is 80 percent of the next month