Karam Inc Has Compiled the Following Data in Order to Put

question 111

Essay

Karam Inc. has compiled the following data in order to put together their first quarter operating budget for 20XX:
Additional information:
Karam sells each unit for $95.
Company policy is to have 30% of next month's sales (in units) in ending finished goods inventory. This policy was met in December.
Company policy is to have 40% of next month's production needs in ending raw materials inventory. The production needs for April is 95,500. This policy was met in December.
It takes three pounds of material to produce each unit and the cost is $2.75/pound.
Required:
A. Prepare a sales budget for the January, February and March and for the first quarter in total.
B. Prepare a production budget for January, February and March and for the first quarter in total.
C. Prepare a direct materials purchases budget for January, February and March and for the first quarter in total.

---

Definitions:

Strategic OM Decisions

Decisions in operations management that are concerned with long-term planning and involve the overall direction of the company, including choices related to the design of products and processes, location of facilities, and capacity planning.

Tariff Barriers

These are taxes or duties imposed on imported products by a country to protect its domestic industries from foreign competition or to generate revenue.

North America

A continent in the Northern Hemisphere that includes countries such as Canada, the United States, and Mexico.

Product's Life Cycle

describes the stages a product goes through from its conception, through development, growth, maturity, and decline.