Homer Manufacturing makes cleaning solvent sold in large container with a plastic liner. Their monthly sales forecast consists of : January 40,000 units, February 38,500 units, and March 39,750 units. Desired endiry inventory of finishd goods (in units) is 10% of the next month's sales forecast. Planned production (in units) for next quarter is: January: 43,800 units February: 41,000 units March: 50,250 units Further, each container of cleaning solvent consists of: 6 gallons of chemicals 1 plastic liner Company policy requires that ending inventories of raw materials for each month be 15% of the next month's production needs. The policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2.00. The cost of one liner is $1.60. 1. Calculate the ending inventory of plastic coating (in units) for December of the prior year, and then for January and February.
Homer Manufacturing makes cleaning solvent sold in large container with a plastic liner. Their monthly sales
Planned production (in units) for next quarter is:
January: 43,800 units
February: 41,000 units
March: 50,250 units
Further, each container of cleaning solvent consists of:
6 gallons of chemicals
1 plastic liner
Company policy requires that ending inventories of raw materials for each month be 15% of the next month's production needs. The policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2.00. The cost of one liner is $1.60.
1. Calculate the ending inventory of plastic coating (in units) for December of the prior year, and then for January and February.
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