A Sales Budget Is Given Below for One of the Products

question 134

Essay

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

The inventory of finished goods at the end of each month must 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 kilograms of specialized material. Since the production of this specialized material by OMI'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 material to be purchased each month for January, February, and March, and in total for the quarter.

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Definitions:

Genetic Progress

The improvement of traits in a population of organisms over generations through selection and breeding.

Plant Species

A group of plants that share common characteristics and genetic makeup, capable of interbreeding and producing fertile offspring.

Biomes

Large ecological zones on Earth's surface, characterized by distinct types of vegetation, wildlife, and climate conditions.

Environmental Changes

Alterations to the natural environment caused by natural phenomena or human activities, affecting ecosystems, climate, and natural resources.