Fair Score Company Production Plan for 2015
How many scoreboards should Fair Score Company produce in 2015?
Fair Score Company should produce 10,000 scoreboards in addition to the beginning inventory and work-in-process inventory to meet the expected sales and target ending finished inventory.
Answer:
Fair Score Company should produce 21,000 scoreboards in 2015.
Here's the calculation:
Beginning inventory of direct materials = 8,000 units
Add: Beginning work-in-process inventory = 2,000 units
Total units to account for = 10,000 units
20,000 scoreboards are expected to be sold, and the target ending finished inventory is 3,000 units. Therefore, the total units needed to be produced are:
20,000 + 3,000 - 4,000 = 19,000 units
Since there is no ending work-in-process inventory, the total units to be accounted for is the total units needed to be produced:
10,000 + units to be produced = 19,000
Units to be produced = 9,000
However, since the beginning work-in-process inventory is 50% complete as to labor and overhead, we need to account for the additional units needed to complete that inventory:
2,000 x 50% = 1,000 units
9,000 + 1,000 = 10,000 units
Therefore, Fair Score Company should produce 10,000 scoreboards in addition to the beginning inventory and work-in-process inventory to meet the expected sales and target ending finished inventory.
Fair Score Company, a manufacturer of scoreboards for athletic events, is planning its production for the year 2015. Based on the data provided, the company expects to sell 20,000 scoreboards in that year. To meet this demand and also account for the target ending finished inventory, Fair Score Company needs to carefully plan its production.
The total number of scoreboards that the company should produce in 2015 is 21,000 units. This calculation takes into consideration the beginning inventory of direct materials, beginning work-in-process inventory, expected sales, and target ending finished inventory.
By producing 21,000 scoreboards, Fair Score Company will be able to meet the demand from customers and ensure that there is enough inventory to cover sales and maintain the desired ending finished inventory level.
It is crucial for manufacturing companies like Fair Score Company to plan their production accurately to meet customer demand while also managing inventory levels effectively. By doing so, they can ensure smooth operations and maximize profitability.