Question
M company has 6000 units of finished goods inventory as of December 31. Sales for the first four months of next year are projected as
M company has 6000 units of finished goods inventory as of December 31. Sales for the first four months of next year are projected as follows: January 30,000 units, February 40,000 units, March 60,000 units, and April 50,000 units. The firm wants ending inventory each month to equal 20 percent of sales for next month. Prepare a schedule of required production for each month and for the quarter.
Additionally, M Company anticipates purchases for the next quarter as follows: January 30,000, February 50,000, March 60,000. Purchases in December totaled 20,000. Thirty percent of the amount purchased is paid for in the month of purchase and 70 percent in the month following purchase. Prepare a separate schedule of payments for each month and for the next quarter.
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