The Fancy Umbrella Company makes recyclable beach umbrellas. The production process requires 3 square meters of plastic

Question:

The Fancy Umbrella Company makes recyclable beach umbrellas. The production process requires 3 square meters of plastic sheeting and a metal pole. The plastic sheeting costs \($0.50\) per square meter and each metal pole costs \($1.00.\) At the beginning of the month, the company has 5,000 square meters of plastic and 1,000 poles in Raw Materials inventory. The preferred raw material amount at the end of the month is 3,000 square meters of plastic sheeting and 600 poles. At the beginning of the month, the company has 300 finished umbrellas in inventory. It plans to have 200 finished umbrellas at the end of the month. Sales in the coming month are expected to be 5,000 umbrellas.

a. How many umbrellas must the company produce to meet demand and have sufficient ending inventory?

b. What is the cost of materials that must be purchased?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Management Accounting In A Dynamic Environment

ISBN: 9780415839020

1st Edition

Authors: Cheryl S McWatters, Jerold L Zimmerman

Question Posted: