Question
Donnelly Manufacturing sells cedar birdhouses. The company has prepared the following sales forecast for the third quarter of 2019: July 5,000 units August 6,000 units
Donnelly Manufacturing sells cedar birdhouses. The company has prepared the following sales forecast for the third quarter of 2019:
July | 5,000 units |
August | 6,000 units |
September | 10,000 units |
June 30, 2019, inventory was budgeted at 1,000 units. Management would like the desired quantity of finished goods inventory at the end of each month to be equal to 15 percent of next months budgeted unit sales. Octobers sales are projected to be 12,000 units.
Each completed unit of finished product requires 3 square feet of cedar at a cost of $1.50 per square foot. The company has determined that it needs 10 percent of next months raw material needs on hand at the end of each month.
Determine the projected production in units for August
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