The firmu2019s policy is to have finished goods inventory

Reference no: EM13581057

Osage Inc., has actual sales for June and July and forecast sales for August, September, October, and November as follows:


Actual:
June	5,890	units
July	6,160	units
Forecasted:
August	6,020	units
September	6,740	units
October	5,540	units
November	5,280	units

Required:
(a)	The firm%u2019s policy is to have finished goods inventory on hand at the end of the month that is equal to 50% of the next month%u2019s sales. It is currently estimated that there will be 3,970 units on hand at the end of July. Calculate the number of units to be produced in each of the months of August, September, and October. (Round your answers to nearest whole number.)

	August	September	October
Production

(b)

Each unit of finished product requires 8 pounds of raw materials. The firm%u2019s policy is to have raw material inventory on hand at the end of each month that is equal to 55% of the next month%u2019s estimated usage. It is currently estimated that 25,900 pounds of raw materials will be on hand at the end of July. Calculate the number of pounds of raw materials to be purchased in each of the months of August and September. (Round your answers to nearest whole number.)

Reference no: EM13581057

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