Wood Parts-Musical Instruments Ltd Wood Parts-Musical Instruments LTD (WPMI) is a worldwide wooden musical part manufacturing firm based in North America. After many years in the market, the Peterborough division, which produces one product called "XylophonelBX reaches a spike on the sales level. The Management wants to have a significant investment to expand the facility and increase production, but it is requesting from the division to prepare a monthly 2021 budget. The fiscal year ends on Dec 31. The division manager forecast the following sales: For the year ended Dec 31, 2020: 95,000 units at $50.00 each * (*Expected sales for the year ended December 31, 2020 are based on actual sales to date and budgeted sales for the duration of the year) For the year ended Dec 31, 2021: 100,000 units at $50.00 each For the year ended Dec 31, 2022: 110,000 units at $50.00 each. 1. The management expect a distribution of sales for each month based on percentage of the total budgeted as follow: Jan, Feb & Mar 2% each; Apr, Aug and Sep 6% each: May, Jun & Jul 9% each; Oct 10%; Nov 17% & Dec 22%. 2. From previous experience, management has determined that an ending inventory equal to 20% of the next month's sales is required to fit the buyer's demands. I 3. Because sales are seasonal, Wood Parts-Musical Instruments must rent an additional storage facility from October to December to house the additional inventory on hand. The only related cost is a flat $10,000 per month. payable at the beginning of the month. 4. The Xylophone IbX requires three types of raw materials: Plastic PR is a compact material that is purchased in powder form. Each Xylophone IBX requires 0.5 kilograms of Plastic PR. at a cost of $25.00 per kilogram. The supplier of Plastic PR tends to be somewhat erratic so Wood Parts-Musical Instruments finds it necessary to maintain an inventory balance equal to 40% of the following month's Wood Parts-Musical Instruments Ltd Wood Parts-Musical Instruments LTD (WPMI) is a worldwide wooden musical part manufacturing firm based in North America. After many years in the market, the Peterborough division, which produces one product called "XylophonelBX reaches a spike on the sales level. The Management wants to have a significant investment to expand the facility and increase production, but it is requesting from the division to prepare a monthly 2021 budget. The fiscal year ends on Dec 31. The division manager forecast the following sales: For the year ended Dec 31, 2020: 95,000 units at $50.00 each * (*Expected sales for the year ended December 31, 2020 are based on actual sales to date and budgeted sales for the duration of the year) For the year ended Dec 31, 2021: 100,000 units at $50.00 each For the year ended Dec 31, 2022: 110,000 units at $50.00 each. 1. The management expect a distribution of sales for each month based on percentage of the total budgeted as follow: Jan, Feb & Mar 2% each; Apr, Aug and Sep 6% each: May, Jun & Jul 9% each; Oct 10%; Nov 17% & Dec 22%. 2. From previous experience, management has determined that an ending inventory equal to 20% of the next month's sales is required to fit the buyer's demands. I 3. Because sales are seasonal, Wood Parts-Musical Instruments must rent an additional storage facility from October to December to house the additional inventory on hand. The only related cost is a flat $10,000 per month. payable at the beginning of the month. 4. The Xylophone IbX requires three types of raw materials: Plastic PR is a compact material that is purchased in powder form. Each Xylophone IBX requires 0.5 kilograms of Plastic PR. at a cost of $25.00 per kilogram. The supplier of Plastic PR tends to be somewhat erratic so Wood Parts-Musical Instruments finds it necessary to maintain an inventory balance equal to 40% of the following month's
