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Figure 9-2. Wilmer Company produces two products: OldX and NewX. Budgeted sales for four months are as follows:

Figure 9-2.
Wilmer Company produces two products: OldX and NewX. Budgeted sales for four months are as follows:


OldX NewX
May 10,000 40,000
June 20,000 70,000
July 15,000 80,000
August 30,000 90,000


Wilmer's ending inventory policy is that OldX should have 10% of next month's sales in ending inventory and NewX should have 20% of next month's sales in ending inventory. On May 1, there were 1,000 units of OldX and 9,000 units of NewX.

NewX requires 4 units of component A. (OldX does not use component A.) There were 2,100 units of component A in inventory on May 1. Wilmer wants to have 30 percent of the following month's production needs in inventory for Component A.

Refer to Figure 9-2. What is the desired ending inventory of component A for May?
OldX

NewX
May
10,000

40,000
June
20,000

70,000
July
15,000

80,000
August
30,000

90,000


Wilmer's ending inventory policy is that OldX should have 10% of next month's sales in ending inventory and NewX should have 20% of next month's sales in ending inventory. On May 1, there were 1,000 units of OldX and 9,000 units of NewX.

NewX requires 4 units of component A. (OldX does not use component A.) There were 2,100 units of component A in inventory on May 1. Wilmer wants to have 30 percent of the following month's production needs in inventory for Component A.

Refer to Figure 9-2. How many units of NewX are budgeted for production in June?

1. 64,000
2. 86,000
3. 45,000
4. 72,000
5. 70,000

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