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Fuqua Companys sales budget projects unit sales of part 198Z of 10,600 units in January, 12,400 units in February, and 13,300 units in March. Each
Fuqua Companys sales budget projects unit sales of part 198Z of 10,600 units in January, 12,400 units in February, and 13,300 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $4 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next months production requirements, and its ending finished goods inventory to equal 20% of the next months expected unit sales. These goals were met at December 31, 2013.
Exercise 21-12 (Part Level Submission) Fuqua Company's sales budget projects unit sales of part 198Z of 10,600 units in January, 12,400 units in February, and 13,300 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $4 per pound. Fuqua Company desies its ending raw matenals inventory to equal 40% of the next month's production requirements, and its ending nished goods inventory to equal 20% of the next month's expected unit sales. These goals were met at December 31, 2013. (a) Your answer is correct Prepare a production budget for January and February 2014. FUQUA COMPANY Production Budget For the Two Months Ending February 28,2014 Januar Februar 1 Expected Unit Sales Add LT Desired Ending Finished Goods Inventory Total Required Units Less I. T Beginning Finished Goods Inventory Required Production Units 10600 2480 13080 2120 12400 2660 15060 2480 12580 10960Step by Step Solution
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