How many cars does Ryno expect to produce (i.e., assemble) in January?
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Ryno Corporation assembles cars by purchasing frames, wheels, and other parts from various suppliers. Consider the following data:
- The company plans to sell 25,000 cars during each month of the year's first quarter.
- A review of the accounting records disclosed a finished-goods inventory of 1,400 cars on January 1 and an expected finished-goods inventory of 1,850 cars on January 31.
- Ryno has 4,300 wheels in inventory on January 1, a level that is expected to drop by 5% at month-end.
Question:
A. How many cars does Ryno expect to produce (i.e., assemble) in January?
B. How many wheels must be purchased to satisfy production needs?
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Solution Summary
The solution explains how to make a production and a purchases budget for a car company.
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A. How many cars does Ryno expect to produce (i.e., assemble) in January?
Amount to assemble is the sales + what we want in ending inventory. Some amount is available in beginning inventory ...
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