A Sales Budget Is Given Below for One of the Products

question 54

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 totaled only 4,000 units.
Each unit of product requires three pounds 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:
a.Prepare a budget showing the required production each month for January,February,March,and April.
b.Prepare a budget showing the quantity of switches to be purchased each month for January,February,and March.

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Definitions:

Enlightenment

An intellectual and philosophical movement that dominated the world of ideas in Europe during the 17th and 18th centuries, emphasizing reason, individualism, and skepticism.

New York's Economic Growth

Refers to the increase in the wealth and resources of New York over time, often marked by rises in GDP, income, and employment.

Dutch Merchants

Traders from the Netherlands who were particularly influential during the 16th to 18th centuries, known for their global trading networks including the East Indies trade.

British Taxes

Refers to taxes imposed by the British government on the American colonies, leading to tensions and contributing to the American Revolution.