9/ Trago Company manufactures a single product and has a JIT policy that ending
ID: 2554428 • Letter: 9
Question
9/ Trago Company manufactures a single product and has a JIT policy that ending inventory must equal 10% of the next month's sales. It estimates that May's ending inventory will consist of 28,600 units. June and July sales are estimated to be 286,000 and 296,000 units, respectively. Compute the number of units to be produced that would appear on the company's production budget for the month of June.
Multiple Choice
286,000 units.
257,400 units.
315,600 units.
287,000 units.
293,140 units.
10/ Cameroon Corp. manufactures and sells electric staplers for $16.10 each. If 10,000 units were sold in December, and management forecasts 3% growth in sales each month, the dollar amount of electric stapler sales budgeted for February should be:
Multiple Choice
$181,207
$165,830
$175,929
$170,805
$161,000
Explanation / Answer
Dear student, only one question is allowed at a time. I am answering the first question
Opening Inventory of June
= Closing Inventory of May
= 28,600 units
Closing Inventory of June
= 10% of estimated Sales of July
= 10% of 296,000 units
= 29,600 units
So, the number of units to be produced in June
= Closing Inventory for June + Sales of June – Opening Inventory of June
= 29,600 + 286,000 - 28,600
= 287,000 units
So, as per above calculations, option D is the correct option
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