The planned production for July is 120,000 cars. Sales are forecasted at 90,000 toy cars for June and 120,000 toy cars for July. Each toy car requires four wheels. ABC's policy is to maintain a 10% of the next month's production in materials inventory at the end of the month. ABC's budgeted materials purchase of wheels during June is 552,000 units and the ending balance for the month of May was 56,000 units. Compute the planned number of toy cars to produce for the month of June based on the given information.
The planned production for July is 120,000 cars. Sales are forecasted at 90,000 toy cars for June and 120,000 toy cars for July. Each toy car requires four wheels. ABC's policy is to maintain a 10% of the next month's production in materials inventory at the end of the month. ABC's budgeted materials purchase of wheels during June is 552,000 units and the ending balance for the month of May was 56,000 units. Compute the planned number of toy cars to produce for the month of June based on the given information.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The planned production for July is 120,000 cars. Sales are forecasted at 90,000 toy cars for June and 120,000 toy cars for July. Each toy car requires four wheels. ABC's policy is to maintain a 10% of the next month's production in materials inventory at the end of the month. ABC's budgeted materials purchase of wheels during June is 552,000 units and the ending balance for the month of May was 56,000 units.
Compute the planned number of toy cars to produce for the month of June based on the given information.
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