maynor ltd makes a single type of product and carries no work in process inventory t 3384340

Maynor Ltd. makes a single type of product and carries no Work in Process Inventory. The company has prepared the following sales forecast for each half of 2010: January through June……………………………… 1,500,000 units July through December……………………………… 1,680,000 units Estimated ending finished goods inventories are December 31, 2009……………………………… 120,000 units June 30, 2010………………………………………. 104,000 units December 31, 2010……………………………… 60,000 units Each unit of product requires 2.5 pounds of Material A (cost, $6 per pound) and 1.5 pounds of Material B (cost $11 per pound). Estimated raw material inventories are Required: (a) Prepare a production budget for each half of 2010. (b) Prepare purchases budgets for Materials A and B for each half of 2010 (in units and dollars). (c) Maynor Ltd. expects to steadily decrease its ending inventory of Material A, but shows a significant increase in its holdings of Material B (the more expensive material). Why would a company want to hold such large quantities of a raw material inventory item? Give an example of an inventory item of which a company might want to increase its holdings. What costs would a company incur for holding large quantities of an inventory item?

 

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

order now
Get 15% Discount: Coupon code [ SAVE15 ]