Question
Osage Inc. has actual sales for May and June and forecast sales for July, August, September, and October as follows: Actual: May 5,840 units June
Osage Inc. has actual sales for May and June and forecast sales for July, August, September, and October as follows: Actual: May 5,840 units June 6,110 units Forecast: July 5,960 units August 6,760 units September 5,610 units October 5,400 units Required: a. The firms policy is to have finished goods inventory on hand at the end of the month that is equal to 75% of the next months sales. It is currently estimated that there will be 4,470 units on hand at the end of June. Calculate the number of units to be produced in each of the months of July, August, and September. b. Each unit of finished product requires 4 pounds of raw materials. The firms policy is to have raw material inventory on hand at the end of each month that is equal to 55% of the next months estimated usage. It is currently estimated that 25,600 pounds of raw materials will be on hand at the end of June. Calculate the number of pounds of raw materials to be purchased in each of the months of July and August.
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