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Almo Company has the following projected sales for one of the products it manufactures: 38.000 units January February 40.000 units 55,000 units The inventory of
Almo Company has the following projected sales for one of the products it manufactures: 38.000 units January February 40.000 units 55,000 units The inventory of finished goods at the end of each month must equal 20% of the next month's sales. However, on December 31, the finished goods inventory totaled only Each unit of product requires 3 kilograms of specialized material. Since the production of this specialized material by Almo's suppliers is sometimes irregular, the company has a policy of maintaining an ending material inventory at the end of each month equal to 30% of the next month's production needs. The December 31 balance of material Inventory was 26, 100 kilograms Required: Prepare a production budget showing the quantity of finished goods to be produced in January and February (A total" column is not required.) (5 marks) b Prepare a budget showing the quantity of raw material to be purchased for January (4 marks) Finished goods have a product cost of $6.00 per unit. What is the amount that will appear on the forecasted February balance sheet as finished goods inventory? (1 mark
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