Cherboneau Novelties produces drink coasters (among many other products). During the current year (year 0), the company sold 530,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 560,000 units, and, in year 2, it expects to sell 744,000 units. The target ending finished goods inventory for each month is equal to the next month's sales. However, because of production issues, the ending inventory in the current year is expected to be only 17,000 units.Each unit requires 0.5 pound of cork. At the end of the current year, management expects to have 21,250 pounds of cork in inventory.Management has set a target to have cork on hand equal to one half of next month's sales requirements. Sales and production take place evenly throughout the year.Required:8. Compute the total targeted production of the finished coaster for the coming year.b. Compute the required amount of cork to be purchased for the coming year.a.Total targeted production in unitsb. Materials to be purchased in poundsunits pounds Cherboneau Novelties produces drink coasters (among many other products). During the current year (year 0), the company sold530,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 560,000 units, and, in year 2, itexpects to sell 744,000 units. The target ending finished goods inventory for each month is equal to the next month's sales. However,because of production issues, the ending inventory in the current year is expected to be only 17,000 units.Each unit requires 0.5 pound of cork. At the end of the current year, management expects to have 21,250 pounds of cork in inventory.Management has set a target to have cork on hand equal to one half of next month's sales requirements. Sales and production takeplace evenly throughout the year.Required:a. Compute the total targeted production of the finished coaster for the coming year.b. Compute the required amount of cork to be purchased for the coming year.a. Total targeted production in unitsb. Materials to be purchased in poundsunitspounds

The term "targeted production" refers to the quantity or volume of goods, services, or output that a…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cherboneau Novelties produces drink coasters (among many other products). During the current year (year 0), the company sold 530,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 560,000 units, and, in year 2, it expects to sell 744,000 units. The target ending finished goods inventory for each month is equal to the next month's sales. However, because of production issues, the ending inventory in the current year is expected to be only 17,000 units. Each unit requires 0.5 pound of cork. At the end of the current year, management expects to have 21,250 pounds of cork in inventory. Management has set a target to have cork on hand equal to one half of next month's sales requirements. Sales and production take place evenly throughout the year. Required: 8. Compute the total targeted production of the finished coaster for the coming year. b. Compute the required amount of cork to be purchased for the coming year. a. Total targeted production in units b. Materials to be purchased in pounds units pounds

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