Connor Company produces speaker systems for cars. Estimated sales (in units) in January are 40,000; in February 37,000; and in March 34,000. Each unit is priced at $60. Connor wants to have 35% of the following month's sales in ending inventory. That requirement was met on January 1. Each speaker system requires 3 boxes and 15 yards of wire. Boxes cost $4 each and wire is $0.60 per yard. Connor wants to have 20% of the following month's production needs in ending raw materials inventory. On January 1, Connor had 24,000 boxes and 100,000 yards of wire in inventory. How many boxes does Connor expect to purchase in January? a. 214,550b. 159,650c. 148,500d. 138,420e. 114,420

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24 January, 16:35

Connor Company produces speaker systems for cars. Estimated sales (in units) in January are 40,000; in February 37,000; and in March 34,000. Each unit is priced at $60. Connor wants to have 35% of the following month's sales in ending inventory. That requirement was met on January 1. Each speaker system requires 3 boxes and 15 yards of wire. Boxes cost $4 each and wire is $0.60 per yard. Connor wants to have 20% of the following month's production needs in ending raw materials inventory. On January 1, Connor had 24,000 boxes and 100,000 yards of wire in inventory. How many boxes does Connor expect to purchase in January? a. 214,550b. 159,650c. 148,500d. 138,420e. 114,420

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Clare · Answer 1

Our answer is E 114,420

Explanation:

Production budget:

Jan Feb Mar

Budgeted sales units 40000 37000 34000

Add: Ending inventory 12950 11900

Total requirement 52950 48900

Less: Beginning inventory 14000 12950

Budgeted production units 38950 35950

Purchase budget of Box:

Jan Feb

Budgeted production 38950 35950

Bx required per unit 3 3

Total requirement of Boxes 116850 107850

Add: Ending inventory 21570

Total boxes needed 138420

Less: Beginning inventory 24000

Budgeted Purchase boxes 114420

Answer is E. 114420