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Question 3 5 Marks Varney Company makes rolling suitcases. Its sales budget for four months is:...

Question 3 5 Marks Varney Company makes rolling suitcases. Its sales budget for four months is:

Month Sales R
March 15,000
April 20 000
May 40,000
June 60,000

Varney's policy is that ending inventory of finished suitcases should equal 30% of the next month's sales. Beginning inventory (March 1) is 5,300 suitcases.

Each suitcase required 1.5 meters of ballistic nylon. The ending inventory policy for nylon is that 20% of the following month's production needs must be on hand. On March 1, Varney had 10,450 meters of nylon in inventory.

Required:

3.1 What is the desired ending inventory of suitcases for April? (1)

3.2 What is the budgeted production of suitcases for April? (1)

3.3 What is the desired ending inventory of nylon for March? (1)

3.4 What are the budgeted meters of nylon to be purchased in March? (1)

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Answer #1

3.1 What is the desired ending inventory of suitcases for April?

Ans: 8000

3.2 What is the budgeted production of suitcases for April?

Ans: 24000

3.3 What is the desired ending inventory of nylon for March?

Ans: 7200

3.4 What are the budgeted meters of nylon to be purchased in March?

Ans: 17300

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