Montrose Instrumentation produces measurement equipment. One component, used in a variety of the company's products, is critical and the supply chain often breaks. For that reason, Montrose has a policy to hold in inventory enough of the component to produce three month's worth of sales (one component is used in each unit of product in which it is used). On February 1, the company has 31,000 components in stock. Sales of the units in which the component is used in each of the next six months are estimated to be as follows: February March 32,500 26,500 April May 28,000 33,550 June July 30,150 42,110 Parts are purchased at a wholesale price of $46. The vendor has a financing arrangement by which Montrose pays 40 percent of the purchase price in the month when the components are delivered and 60 percent in the following month. Montrose purchased 38,000 parts in January. Required: a. Estimate purchases of the component (in units) for February and March. b. Estimate the cash disbursements for the component in February and March.
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- Acme Ltd. manufactures point of sale terminals used by businesses to process transactions. At the close of business on 30 September, the company had 450 terminals in inventory. The company's policy is to maintain an ending inventory of terminals equal to 30 per cent of next month's sales. Each terminal manufactured requires 25 minutes of assembly and inspecting time at a cost of 70 cents per minute. The company expects the following sales activity: October 8 000 units November 12 000 units December 13 000 units January 10 000 units What is the total projected direct labour cost for November and December? O $302 000 O None of the other alternatives $210 000 O $427 000Scalia Systems manufactures rugged handheld computers for use in adverse working environments. Scalia tries to maintain inventory at 40% of the following month's expected unit sales. Scalia began the year with 8,000 units in stock, based on the following unit sales projections prepared by the sales manager: January 20,000 February 25,000 March 18,000 April 22,000 Prepare a schedule of planned unit production for January through March. January February MarchKeggler’s Supply is a merchandiser of three different products. The company’s February 28 inventories are footwear, 20,000 units; sports equipment, 80,000 units; and apparel, 50,000 units. Management believes each of these inventories is too high. As a result, a new policy dictates that ending inventory in any month should equal 30% of the expected unit sales for the following month. Expected sales in units for March, April, May, and June follow. Budgeted Sales in Units March April May June Footwear 15,000 25,000 32,000 35,000 Sports equipment 70,000 90,000 95,000 90,000 Apparel 40,000 38,000 37,000 25,000 1. Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May.
- Sapphire Aerospace operates 52 weeks per year, and its cost of goods sold last year was $6,500,000. The firm carries eight items in inventory: four raw materials, two work-in-process items, and two finished goods. Table shows last year’s average inventory levels for these items, along with their unit values.a. What is the average aggregate inventory value?b. How many weeks of supply does the firm have?c. What was the inventory turnover last year? Sapphire Aerospace Inventory Items Category Part Number Average InventoryUnits Value per Unit Raw materials RM-1 20000 $1 RM-2 5000 5 RM-3 3000 6 RM-4 1000 8 Work-in-process WIP-1 6000 10 WIP-2 8000 12 Finished goods FG-1 1000 65 FG-2 500 88Sellars Inc. manufactures widgets. At 30 June, the company had 2000 widgets in inventory. The company's policy is to maintain a widget ending inventory equal to 10 per cent of next month's sales. In addition, each widget manufactured requires 6 minutes of assembly and inspecting time at a cost of $.25 per minute. The company expects the following sales activity for the third quarter of the year: July 25 000 units August 45 000 units September 40 000 units What is the projected direct labour cost for August? O $57 000 O $61 500 $66 750 O $55 800Net Steels is a steel manufacturing company. It currently orders 180 metric tons of raw material per order. It was observed that the company often faces stockout. To tackle this issue, the company incorporated a fixed-quantity system (FQS) and collected the following data. The lead time is 2 weeks. Demand Order Cost Item Cost Inventory-Holding Cost 10000 metric tons per year $17000 per order $38000 per year 20 percent per year Assuming there are 50 weeks a year, determine the reorder point. Only for non-integer results, round your answer UP to the nearest integer. For example, if your answer is 5.05, type 6; if your answer is 5, type 5. 2DCO Economic Order Quantity (EOQ), Q* = Cn Reorder point, r = demand rate x lead time Your Answer: Answer
- Neu Fabrication Company operates 360 days a year and uses 150 cartridges each day. Using a continuous inventory system, Neu orders 10,800 cartridges at a time. The orders are timed so that the new cartridges arrive just as inventory runs out (i.e. inventory level = 0), and replenishment is instantaneous. If Co= $1,400, what is the total ordering cost for all orders in a year (i.e. the Annual Ordering Cost)? O $1400 $7000 $2800 $500Tiny Corp has the following information: Inventory at the end of May, for example, was only 40 units. The manager plans to implement a policy whereby finished-goods inventory is 60% of the following month's sales. Sales for the months of June, July, and August are expected to be 5,500 units, 6,100 units, and 5,900 units, respectively. Determine the number of units that Tiny must produce in June and July.AM is a trading entity. Purchases are on credit, with 70% paid in the month following the date ofpurchase and 30% paid in the month after that.Sales are partly on credit and partly for cash. Customers who receive credit are given 30 days topay. On average 60% pay within30 days, 30% pay between 30 and 60 days and 5% pay between60 and 90 days. The balance is written off as irrecoverable. Other overheads, including salaries,are paid within the month incurred.AM plan to purchase new equipment at the end of June 2015, the expected cost of which isP250,000. The equipment will be purchases on 30 days credit, payable at the end of July.The cash balance on 1 May 2015 is P96,000.The actual/budgeted figures for the six month to July 2015 were: actual budgeted FEB P000 MAR P000 APRIL P000 MAY P000 JUNE P000 JULY P000 credit sales 100 100 110 110 120 120 cash sales 30 30 30 35 40 40 credit purchases 45 50 50 55 55 60 other overhead expenses 40 40 40 40 50 50…
- Keggler's Supply is a merchandiser of three different products. The company's February 28 inventories are footwear, 19,000 units, sports equipment, 81,500 units; and apparel, 49,000 units. Management belleves each of these inventories is too high. As a result, a new policy dictates that ending inventory in any month should equal 29% of the expected unit sales for the following month. Expected sales in units for March, April, May, and June follow. Footwear Sports equipment Apparel Required: 1. Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May. Budgeted Sales in Units March April May 15,000 24,500 31,000 71,500 88,000 95,000 40,500 37,500 33,000 24,000 FOOTWEAR Budgeted sales for next month Ratio of ending inventory to future sales Required units of available merchandise Budgeted purchases SPORTS EQUIPMENT Budgeted sales for next month Ratio of ending inventory to future sales Budgeted purchases APPAREL Merchandise…Jack Jones, the materials manager at Precision Enterprises,is beginning to look for ways to reduce inventories. A re-cent accounting statement shows the following inventoryinvestment by category: raw materials, $3,129,500; work-in-process, $6,237,000; and finished goods, $2,686,500.This year’s cost of goods sold will be about $32.5 mil-lion. Assuming 52 business weeks per year, express totalinventory asa. Weeks of supplyb. Inventory turnsPatrick Inc. makes industrial solvents sold in 5-gallon drum containers. Planned production in units for the first 3 months of the coming year is: January 43,800 February 41,000 March 50,250 Each drum requires 5.5 gallons of chemicals and one plastic drum container. Company policy requires that ending inventories of raw materials for each month be 15% of the next month's production needs. That policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2.00. The cost of one drum is $1.60. Required: Calculate the ending inventory of chemicals in gallons for December of the prior year, and for January and February. What is the beginning inventory of chemicals for January? Prepare a direct materials purchases budget for chemicals for the months of January and February. Calculate the ending inventory of drums for December of the prior year, and for January and February. Round your answers to…