Question

Hanover Inc. sells buckets for $15 each. Budgeted unit sales for 4 months of 2014 are: March 26,000 buckets April 28,000 buckets May 22,000 buckets June 25,000 buckets Hanover desires to have buckets on hand at the end of each month equal to 16 percent of the following month's budgeted unit sales. Each bucket requires 3.9 pounds of plastic. At the end of each month, Hanover desires to have 12 percent of production material needs for the next month on hand. The plastic costs $0.40 per pound. How many buckets should Hanover produce during May? TH 27,040 buckets 31,520 buckets 27,280 buckets None of the answer choices are correct.

Answer 1

1)	Hanover				May
	Expected unit sales				22,000
	Add ending inventory(25000*16%)				4000
	total need				26,000
	less Beginning inventory(22000*16%)				3520
	desired production				22,480
	None of the answers are correct
2)	paradise gifts				Feb
	Expected unit sales				13,000
	Add ending inventory(17000*25%)				4250
	total need				17,250
	less Beginning inventory(13000*25%)				3250
	desired production				14,000
	Answer)	14000 units
3)	Cash collection				May
	May	(260000*25%)			65000
	April	(250,000*65%)			162500
	March	(300,000*8%)			24000
	total cash collection				251500
	Answer)	251,500
4)	opening cash balance				60,000
	Add: total cash receipts				250,000
	total cash collection				310,000
	less:Total cash disbursement				-245000
	Excess				65,000
	borrowing				0
	end balance				0
	Answer)	0