Thurston Products
Thurston Products Sells a Popular Style of Running

question 96

Multiple Choice

Thurston Products
Thurston Products sells a popular style of running shoe. The company has prepared the following sales forecast for the second quarter of 2010:
$$\begin{array} { l r } \text { April } & 80000 \text { pairs } \\\text { May } & 100000 \text { pairs } \\\text { June } & 130000 \text { pairs }\end{array}$$
Ending inventory at 31 March 2010 was budgeted at 5000 pairs. Management would like the desired quantity of finished goods inventory at the end of each month to be equal to 6 per cent of next month’s budgeted unit sales. July’s sales are projected to be 120 000 pairs.

Each completed unit of finished product requires 1.5 pounds of rubber material at a cost of $.75 per pound. The company has determined that it needs 10 per cent of next month’s raw material needs on hand at the end of each month.

-The total required production of running shoes for the second quarter of 2010 is:

• A) 317 200 pairs
• B) 312 200 pairs
• C) 307 800 pairs
• D) 323 600 pairs