Sit straight makes bookends Metal is stamped and bent to
Sit straight makes bookends. Metal is stamped and bent to form the bookend, and felt is glued to the bottom to keep the bookends from sliding on surfaces. Each set of bookends requires five ounces of metal ($0.20 per ounce) and two pieces of precut felt ($0.03 per 10 pieces). Sit Straight wants to have a desired ending inventory of 10 percent of the following month’s sales needs relative to finished goods and15percentof the following production month’s needs relative to direct materials. The company’s 2010 second and third quarter sales budgets for sets of book ends follow.
Sit Straight expects to begin April with 2,400 sets of book ends, 18,500 ounces of metal and 7,250 pieces of felt.
Prepare the production and purchases budgets for the second quarter of 2010.
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