Question
Begna Chemicals has projected sales of its product for the next year on a quarterly basis as follows: Quarter Sales (units) 1 st 600 2
Begna Chemicals has projected sales of its product for the next year on a quarterly basis as follows:
Quarter
Sales (units)
1st
600
2nd
900
3rd
1200
4th
720
The finished product requires 4 liters of raw material and 8 hours of direct labor. Begna tries to maintain a Finished Goods ending inventory equal to one-third ofthe next month sales and a Raw Material ending inventory equal to one-half of the current month's production needs. At the beginning of the first quarter, there were 200 units and 350 liters of finished goods and raw materials inventory respectively.
a.What is the production requirement of the 2nd quarter?
b.What is the quantity of direct materials to be purchased in the 2nd quarter?
Step by Step Solution
3.52 Rating (152 Votes )
There are 3 Steps involved in it
Step: 1
a Production requirement for 2nd quarter Sales for 2nd quarter 900 units Ending inventory target 13 ...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started