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Question - Varney Company makes rolling suitcases. Its sales budget for four months is as follows:
Month Unit Sales
March 15,000
April 20,000
May 40,000
June 60,000
Varney's policy is that ending inventory of finished suitcases should equal 30 percent of the next month's sales. Beginning inventory (March 1) is 5,300 suitcases.
Each suitcase required 1.5 yards of ballistic nylon. The ending inventory policy for nylon is that 20 percent of the following month's production needs must be on hand. On March 1, Varney had 10,450 yards of nylon in inventory.
Required -
A. What is the desired ending inventory of suitcases for April?
B. What is the budgeted production of suitcases for April?
C. What is the desired ending inventory of nylon for March?
D. What are the budgeted yards of nylon to be purchased in March?
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