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 P0.30 per pound and Material B can be purchased for P0.50 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. 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. The number of units needed to be manufactured in January would be:
Answers
Explanation:
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52,000 units.
GIVEN: Manufacturing Information regarding Roberts Company.
TO FIND: Units to be produced in January.
SOLUTION: As we are given in the question,
Roberts Company operates in the business of production of home cleaning products.
Some of the conditions are given that might affect the units to be produced in January.
A production Budget is a financial estimate prepared by almost all businesses to meet the inventory requirements and sale targets.
The units to be produced in January can be calculated by:
Since we are given that,
2 pounds of Material A are required to produce a single unit of required goods.
Also, budgeted production for June = 26,000 units
Therefore,
Material A needed for production in the month of June = 26,000 * 2 = 52,000 pounds.
Therefore, the required answer is 52,000.
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