Cherboneau Novelties produces drink coasters (among many other products). During the current year (year O), the company sold 536,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 572,000 units, and, in year 2, it expects to sell 816,000 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 20,000 units. Each unit requires 0.5 pound of cork. At the end of the current year, management expects to have 22,750 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: 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 units b. Materials to be purchased in pounds units pounds
Cherboneau Novelties produces drink coasters (among many other products). During the current year (year O), the company sold 536,000 units (packages of 6 coasters). In the coming year (year 1), the company expects to sell 572,000 units, and, in year 2, it expects to sell 816,000 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 20,000 units. Each unit requires 0.5 pound of cork. At the end of the current year, management expects to have 22,750 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: 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 units b. Materials to be purchased in pounds units pounds
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 4 images
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning