PROBLEM 1 The Clever Manufacturing Company makes Product X from Material A. One pound of Material A is required for each unit of Product X. Budgeted sales (in units) of Product X for the months of May, June, and July, respectively, are 400. 500 and 600. The sales manager desires to have an inventory of Product X at the end of each month equal to 20% of the next month's budgeted sales. Accordingly. the May 1 inventory of Product X was 80 units. The May 1 inventory of Material A was 105 pounds. To assure continuous production the plant manager insists upon having on hand attire and of each month an inventory of Material A equal to 25% of the next month's production. REQUIRED: 1. How many units does the company plan to produce in May and June? Production Budget: May June July For Sales 400 500 600 For Ending Inventory 1m 12]! 20% of next month's sales Total Needed 500 620 Already have (80} (100) beginning inventory Units to Produce 420 520 n II,...,,,,..,,..,J, ,1IJ,A,J,I A ,L,..IJL, ,..,,L,,,J !, Il,.n