A Sales Budget Is Given Below for One of the Products

question 70

Essay

A sales budget is given below for one of the products manufactured by the Key Co.:

The inventory of finished goods at the end of each month should equal 20% of the next month's sales. However, on December 31, the finished goods inventory totalled only 4,000 units.

Each unit of product requires three specialized electrical switches. Since the production of these specialized switches by Key's suppliers is sometimes irregular, the company has a policy of maintaining an ending inventory at the end of each month equal to 30% of the next month's production needs. This requirement had been met on January 1 of the current year.

Required:

Prepare a budget showing the quantity of switches to be purchased each month for January, February, and March, and in total for the quarter.

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Definitions:

Electrical Shock

A sudden discharge of electricity through a part of the body, which can cause damage to tissues and possibly result in cardiac arrest or other serious health issues.

CPR

Cardiopulmonary Resuscitation, a life-saving technique that combines chest compressions and artificial ventilation to maintain circulatory flow and oxygenation during cardiac arrest.

Pulse

The rhythmic expansion and contraction of an artery produced by heartbeats, palpable at various body points and indicative of heart rate and circulation health.

Aspirating

The process of withdrawing fluid from a body cavity, cyst, or joint using suction, often performed using a syringe.