Question
Psi Company produces two products: TB12 and MJ23. Budgeted sales for four months are as follows: TB12 MJ23 May 8,000 20,000 June 13,000 32,000 July
Psi Company produces two products: TB12 and MJ23. Budgeted sales for four months are as follows:
TB12 | MJ23 | |
May | 8,000 | 20,000 |
June | 13,000 | 32,000 |
July | 11,000 | 39,000 |
August | 18,000 | 46,000 |
Psi's ending inventory policy is that TB12 should have 15% of next month's sales in ending inventory and MJ23 should have 40% of next month's sales in ending inventory. On May 1, there were 1,200 units of TB12 and 9,000 units of MJ23. MJ23 requires 6 units of component A. (TB12 does not use component A.) There were 30,000 units of component A in inventory on May 1. Psi wants to have 20% of the following month's production needs in inventory for Component A.
How many units of TB12 are budgeted for production in June?
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