Question

Wheat Inc. has forecast its sales for the coming months as follows:

	Standard Units	Deluxe Units
April	110	70
May	126	87
June	143	94
July	160	108

Wheat maintains finished goods inventory equal to 30% of the next month’s sales requirements. April 1 inventories were 33 standard units and 21 deluxe.

Required:
Prepare a production schedule for April through June. (Round your answers to the nearest whole number and use rounded values for your intermediate calculations.)

Answer 1

• All working forms part of the answer

Production Schedule for Standard Units
Working		April	May	June	Quarter total
A	Budgeted Sales unit	110	126	143	379
B = Next month's 'A' x 30%	Desired ending Inventory	38	43	48	48
C = A+B	Total needs	148	169	191	427
D	Beginning Inventory	33	38	43	33
E = C - D	Total units to be produced	115	131	148	394

Production Schedule for Deluxe Units
Working		April	May	June	Quarter total
A	Budgeted Sales unit	70	87	94	251
B = Next month's 'A' x 30%	Desired ending Inventory	26	28	32	32
C = A+B	Total needs	96	115	126	283
D	Beginning Inventory	21	26	28	21
E = C - D	Total units to be produced	75	89	98	262