Production and purchases budgets
Response to the following problem:
Olympia Productions, Inc., makes award medallions that are attached to ribbons. Each medallion requires 18 inches of ribbon. The sales forecast for February is 8,000 medallions. Estimated beginning inventories and desired ending inventories for February are:
Estimated Beginning Inventory Desired Ending Inventory
Medallions................................4,000 3,200
Ribbon(yards)............................200 80
Required:
a. Calculate the number of medallions to be produced in February.
b. Calculate the number of yards of ribbon to be purchased in February.