Card Bicycle makes bicycles, which use two tires each. At the end of 2018, the...
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Card Bicycle makes bicycles, which use two tires each. At the end of 2018, the Finished Goods Inventory is expected to contain 2,000 Bicycles and Raw Materials is expected to contain 3,000 bicycle tires. There is no Work in Process inventory at the end of any month. The Sales forecast for 2019 projects that the company will sell 12,000 bicycles (quantity, not dollars) in January, 16,000 in February and 18,000 in March and 20,000 in April.
The company has a policy of having 20% of next months bicycle sales in Finished Goods ending inventory each month and 10% of the companys raw material needs for the next month in ending Raw Materials Inventory.
Determine how many tires Card should budget to purchase each of the first three months of 2019.
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