Problem:
Manufacturing firm production and purchases budget Glynn Company is preparing a budget to determine the amount of part G12 to produce for the first quarter of the year, and the amount of resin to purchase for part G12. The company desires to have 25% of the next month's estimated sales of G12 in inventory at the end of each month. Glynn has a very reliable supplier of resin and therefore desires an ending inventory of only 10% of resin needs for the next month's production. Each unit of G12 requires half a pound of resin. Projected sales of G12 for January, February, and March are 50,000 units, 60,000 units, and 54,000 units, respectively.
Required
(a) How many units of part G12 will Glynn budget to produce in January and February?
(b) How many pounds of resin will Glynn budget to purchase in January and February?