Production needs in inventory for component a, Cost Accounting

Production needs in inventory for component a, Cost Accounting

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Kenner company produces two products: SR200 and TX500. Budged sales for four months are as follows;
SR200 TX500
May 8,000 20,000
June 13,000 32,000
July 11,000 39,000
August 18,000 46,000

Kenner's ending inventory policy is that SR200 should have 15% of next month's sales in ending inventory and TX500 should have 40% of next months sales in ending Inventory. On May 1, there were 1,200 units of SR200 and 9,000 units of TX500.

TX500 requires 6 units of component A. (SR200 does not use component A.)There were 30,000 units of Component A in inventory on May 1. Kenner wants to have a 20% of the following month's production needs in inventory for component A.

1. How many units of TX500 are budgeted for production in June?
A. 32,000
B. 34,800
C. 47,600
D. 12,800
E. 45,000
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2.What is the budgeted production of SR200 for May in units?
A. 1200
B. 8000
C. 10500
D. 8750
E. 9950
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