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Nichols Company sells a product for £20. Budgeted sales for the first quarter of...
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Nichols Company sells a product for £20. Budgeted sales for the first quarter of the current year are as follows:
| Budgeted Sales |
January | £80 000 |
February | 50 000 |
March | 90 000 |
The company wants to maintain an inventory of finished units equal to 30 per cent of the following month's sales, and 1000 units are on hand at the beginning of the year. Each unit requires two pounds of raw material costing £1 per pound. The company maintains a raw materials inventory equal to 10 per cent of the following month's production needs. Budgeted production in units for February would be?
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