Question
Roberts Company manufactures home cleaning products. One of the products, Quickclean, requires 2 pounds of Material A and 5 pounds of Material B per unit
Roberts Company manufactures home cleaning products. One of the products, Quickclean, requires 2 pounds of Material A and 5 pounds of Material B per unit manufactured. Material A can be purchased from the supplier for $0.30 per pound and Material B can be purchased for $0.50 per pound. The finished goods inventory on hand at the end of each month must be equal to 4,000 units plus 25% of the next month's sales. The raw materials inventory on hand at the end of each month (for either Material A or Material B) must be equal to 80% of the following month's production needs.
Question 1: Assume that on January 1 the inventory of Quickclean was 8,000 units. Expected sales in January are 14,000 units and expected sales in February are 18,000 units. What would the number of units that would be needed to be manufactured in January? Provide your formula for obtaining your answer.
Question 2: Assume that the production budget calls for 26,000 units of Quickclean to be manufactured in June and 32,000 units of Quickclean to be manufactured in July. On May 31 there will be 41,600 pounds of Material A in inventory. How many pounds of Material A would be needed for production during June? Provide the formula you used to arrive at your answer.
Question 3: Assume that the production budget calls for 26,000 units of Quickclean to be manufactured in June and 32,000 units to be manufactured in July. On May 31 there will be 104,000 pounds of Material B in inventory. How many pounds of Material B will be purchased during June? Provide the rational/formula you used to arrive at your answer.
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