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for the number that's highlighted, shouldn't it be 5,000? because it's taken from 20% of the current sale? which is 25,000 x 0.20 = 5,000?
for the number that's highlighted, shouldn't it be 5,000? because it's taken from 20% of the current sale? which is 25,000 x 0.20 = 5,000?
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Production Budget For the Year Ending December 31, 2018 Production Budget January 25,000 8,000 February 40,000 13,000 Month March 65,000 9,000 Apri 45,00 7,00 Expected Unit Sales Add: desired ending finished goods (20% next sale) Total unit sales needs Less: beginning finished goods units Required units to produce 33,000 4,000 53,000 8,000 74,000 13,000 52,00 9,00 29,000 43,0 61,000 45,000 January February March April May June 25,000 units 40,000 units 65,000 units 45,000 units 35,000 units 30,000 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 4,000 units. Each unit of product requires three kilograms of specialized material. Since the production of this specialized material by ISO's suppliers is sometimes irregular, the company has a policy of maintaining an ending inventory at the end of each month equal to 30% of the next month's production needs. This requirement had been met on January 1 of the current year. Required: Prepare a budget showing the quantity of material to be purchased qach month for January, February, and March, and in total for the quarter Step by Step Solution
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