Problem 2 (15 points): Stratosphere, Inc. has the following budgeted sales for t

Question

Problem 2 (15 points): Stratosphere, Inc. has the following budgeted sales for the next quarter. onth: January February Ma 10,000 11,000 12,0 Inventory of finished goods on hand at the beginning of the quarter is 4,000 units. The company desires to maintain ending inventory equal to 20% of next month's sales. Sales for April are expected to be 14,000 units. Calculate the quantity to be produced during January, February, and March. Problem 3 (10 points): Beridze Manufacturing expects the following units to produce. Each unit requires 5 yards of material. Each yard of material costs $10. Beridze wants to maintain ending inventory of 30% of next month's material needs to cover next month's production. Calculate the Direct Material Budget for January and February. Beginning inventory in January is 15,000 yards Month: JanuaryFebruary Marc nits 10,000 11,000 12,00

Explanation / Answer

Production Budget

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Direct Material Budget

January February March Sales in units 10,000 11,000 12,000 Ending inventory 2,200 (11,000*20%) 2,400 (12,000*20%) 2,800 (14,000*20%) Total inventory needed 12,200 13,400 14,800 Beginning inventory (4,000) (2,200) (2,400) Production in units 8,200 11,200 12,400

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