A manufacturing company, VMTC PLC, makes the product, blitz. Monthly sales for the first five months of 2022 have been estimated as: Month Units January 210 000 February 180 000 March 210 000 April 220 000 May 200 000 Additional Information: i. Actual units sold in 2021 November and December were 190 000 and 220 000, respectively. 11. One unit of blitz requires 2 kg of material at $3.50 per kg. iii. One unit of iv. v. blitz requires half an hour of direct labour at a rate of $12 per hour. Based on past experience, 60% of cash is received in the month of sale, 25% the following month, 10% two months after and 5% is usually irrecoverable. Selling price is $18 per unit. vi. The company intends to have finished stock at the end of each month equivalent to 15% of the following month's budgeted sales. The policy regarding stock of raw materials is to have 25% of the following month's production requirements. vii. Stocks at 2022 January 01 are estimated to be 22 000 units of finished goods and 104 000 kg of raw materials.
A manufacturing company, VMTC PLC, makes the product, blitz. Monthly sales for the first five months of 2022 have been estimated as: Month Units January 210 000 February 180 000 March 210 000 April 220 000 May 200 000 Additional Information: i. Actual units sold in 2021 November and December were 190 000 and 220 000, respectively. 11. One unit of blitz requires 2 kg of material at $3.50 per kg. iii. One unit of iv. v. blitz requires half an hour of direct labour at a rate of $12 per hour. Based on past experience, 60% of cash is received in the month of sale, 25% the following month, 10% two months after and 5% is usually irrecoverable. Selling price is $18 per unit. vi. The company intends to have finished stock at the end of each month equivalent to 15% of the following month's budgeted sales. The policy regarding stock of raw materials is to have 25% of the following month's production requirements. vii. Stocks at 2022 January 01 are estimated to be 22 000 units of finished goods and 104 000 kg of raw materials.
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 4EB: Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all...
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