Question 2 (of 2) value 45.00 polnts Franklin Products Limited manufactures and

Question

Question 2 (of 2) value 45.00 polnts Franklin Products Limited manufactures and distributes a number of products to retailers. One of these products, SuperStck, requires four kilograms of material D236 in the manufacture of each unit. The company is now planning raw materials needs for the third quarter-July, August, and September Peak sales of SuperStick occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements a The fin shed goods inventory on hand at the end of each month must be equal to 8.100 units plus 20% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 22,120 units b. The raw materials inventory on hand at the end of each month must be equal to 40% of the fo month's production needs for raw materials. The raw materials inventory on June 30 for material D236 is budgeted to be 129,400 kilograms The company maintains no work in process inventones A sales budget for SuperStick for the last six months of the year follows Units 60,200 75,100 July August September October November December 105,200 53,100 30100 Required: 1. Prepare a production budget for SuperStick for July, August, September, and October Budgeted sales (units) Total needs Required production

Explanation / Answer

Production Budget july Aug Sept oct Budgeted sales (units) 60,200 75,100 105,200 53,100 add:Desired ending inventory 23120 29140 18720 14120 total needs 83,320 104,240 123,920 67,220 less:opening inventory 22,120 23,120 29,140 18,720 Required production 61,200 81,120 94,780 48,500 july Aug Sept Quarter oct Required production(units) 61,200 81,120 94,780 237,100 48,500 material needed per unit 4 4 4 4 4 production needs (kgs) 244800 324480 379120 948400 194000 add desired ending inventory 129792 151648 77600 77600 total needs 374592 476128 456720 1026000 less opening inventory 129,400 129792 151648 129,400 material purchases 245,192 346336 305072 896,600

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