Question

MEL Company manufactures and sells cricket bats for school teams. MEL's best-selling lines are the practice...

MEL Company manufactures and sells cricket bats for school teams. MEL's best-selling lines are the practice bats line and the match bats line. In the first four months of next year, MEL company expects to sell the following:

          Practice Bats

          Match Bats

Units

Selling Price

Units

Selling Price

January

40,000

$11.00

10,000

$21.00

February

88,000

$11.00

12,000

$21.00

March

92,000

$11.00

15,000

$21.00

April

100,000

$11.00

20,000

$21.00

MEL Company requires ending inventory of product equal to 20 percent of the next month's unit sales. Beginning inventory in January was 4,000 practice bats and 600 match bats.

Required:

Construct a production budget for match bats line for MEL Company for the first three months of the coming year and answer the following question.

I. Units that must be produced in the month of January:   

II. Estimated ending inventory of February

III. Units that must be produced in the month of March

Homework Answers

Answer #1

answer :

MEL Company
  production budget( match bats)
January February March
Budgeted unit sales 10000 12000 15000
Add : Desired ending inventory 2400 3000 4000
Total need 12400 15000 19000
Less - Beginning inventory 600 2400 3000
Units to be produced 11800 12600 16000

I. Units that must be produced in the month of January:   

= 11800

II. Estimated ending inventory of February

= 3000

III. Units that must be produced in the month of March

= 16000

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