Rokat Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other institutions. The table tops are manufactured by Rokat, but the table legs are purchased from an outside supplier. The assembly department takes a manufactured table top and attaches the four purchased table legs. It takes 18 minutes of labor to assemble a table. The company follows a policy of producing enough tables to ensure that 40 percent of next month’s sales are in the finished goods inventory. Rokat also purchases sufficient materials to ensure that materials inventory is 60 percent of the following month’s scheduled production. Rokat’s sales budget in units for the next quarter is as follows:
July ……………………..2,300
August ………………….2,500
September ………………2,100
Rokat’s ending inventories in units for June 30 are as follows:
Finished goods ………………….1,900
Materials (legs) ………………….4,000
Required:
1. Calculate the number of tables to be produced during August.
2. Disregarding your response to Requirement 1, assume the required production units for August and September are 1,600 and 1,800, respectively, and the July 31 materials inventory is 4,200 table legs. Compute the number of table legs to be purchased in August.
3. Assume that Rokat Corporation will produce 1,800 units in September. How many employees will be required for the assembly department in September? (Fractional employees are acceptable since employees can be hired on a part-time basis. Assume a 40-hour week and a 4-week month.)
(CMA adapted)