Mac Glow Cosmetics International Company manufactures and distributes lipsticks all over the world. To keep production and sales moving smoothly, the company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 2,000 units plus 25% of the next month’s sales. The finished goods inventory on July 31 is budgeted to be 5,000 units. b. The company maintains no work in process inventories. A sales budget for the last six months of the year follows. Budgeted Unit Sales July........... 10,000 August...... 15,000 September 22,000 October.... 20,000 November 18,200 December 15,800 Required: Prepare a production budget for the month of September.
Mac Glow Cosmetics International Company manufactures and distributes lipsticks all over the world. To keep production and sales moving smoothly, the company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 2,000 units plus 25% of the next month’s sales. The finished goods inventory on July 31 is budgeted to be 5,000 units. b. The company maintains no work in process inventories. A sales budget for the last six months of the year follows. Budgeted Unit Sales July........... 10,000 August...... 15,000 September 22,000 October.... 20,000 November 18,200 December 15,800 Required: Prepare a production budget for the month of September.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mac Glow Cosmetics International Company manufactures and distributes lipsticks all over the world. To keep production and sales moving smoothly, the company has the following inventory requirements:
a. The finished goods inventory on hand at the end of each month must be equal to 2,000 units plus 25% of the next month’s sales. The finished goods inventory on July 31 is budgeted to be 5,000 units.
b. The company maintains no work in process inventories. A sales budget for the last six months of the year follows. Budgeted Unit Sales July........... 10,000 August...... 15,000 September 22,000 October.... 20,000 November 18,200 December 15,800 Required: Prepare a production budget for the month of September.
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