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CH10-02) Swifty Inc. has projected sales to be 16,000 units in January; 20,000 units in February; 12,000 units in March; 10,000 units in April; and
CH10-02) Swifty Inc. has projected sales to be 16,000 units in January; 20,000 units in February; 12,000 units in March; 10,000 units in April; and 20,000 units in May. There are 600 units on hand on January 1. Management has determined that it needs to carry 10% of the following month's sales in ending inventory. Assume that each unit requires 4 litres of raw materials. There are 6,000 litres of raw materials on hand at January 1. Management has decided that raw materials ending inventory should be 25% of next month's production needs. Swifty Inc. pays $2.00 per litre for raw materials. REQUIRED: Prepare a production budget for the first quarter, by month and in total. Production Budget Jan. Feb. Mar. Quarter
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