BOOK: Financial & Managerial Accounting for MBAs, 5e

Page: ISBN 978-161853-232-9

Chapter 22, problem 22-41

Continuing problem P22-40, management is concerned that their supplier of raw materials will have a

strike. Determine the budget implications if management plans to increase the January-end raw materi-

als inventory to 130 percent of Februarys production needs. Offer any recommendations you believe

appropriate

Cubs Incorporated Production Budget For the Months of January and February 2017 Februa 15000 2600 17600 3000 14600 March 13000 Janua Requirements for current sales Desired ending inventory Total requirements Less beginning inventory Production requirements 10000 3000 13000 2000 11000 Cubs Incorporated Purchases Budget For the Month of January 2017 Current requirements (units) Desired ending inventory Total requirements Less beginning inventory Purchases (units) Purchases (dollars at $12 each) 11000 1460 12460 1100 11360 136320