Question: Each acoustic guitar requires a maple neck blank, which Strum purchases for $60. On December 31, 2014, Strum had 400 neck blanks in inventory. Spoilage
Each acoustic guitar requires a maple neck blank, which Strum purchases for $60. On December 31, 2014, Strum had 400 neck blanks in inventory. Spoilage during the production process results in a standard quantity of 1.2 necks per acoustic guitar. Because of recent delivery problems, Strum wants to maintain an ending inventory equal to 50 percent of the following quarters production needs. Since the supplier has assured Strum that the delivery issues will be resolved by the end of December, Strum wants only 330 neck blanks in inventory on December 31, 2015. Prepare the purchases budget for neck blanks for 2015. (Enter "per guitar" value to 1 decimal place, e.g. 3.1. Round all other answers to 0 decimal places, e.g. 153.)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
