Smith Manufacturing produces self-watering planters for use in upscale retail es

Question

Smith Manufacturing produces self-watering planters for use in upscale retail establishments. Sales projections for the first five months of the upcoming year show the estimated unit sales of the planters each month to be as follows: (Click the icon to view additional information.) Inventory at the start of the year was 975 planters. The desired inventory of planters at the end of each month should be equal to 25% of the following month's budgeted sales. Each planter requires four pounds of polypropylene (a type of plastic). The company wants to have 30% of the polypropylene required for next month's production on hand at the end of each month. The polypropylene costs $0.20 per pound. Read the requirements Requirement 1. Prepare a production budget for each month in the first quarter of the year, including production in units for each month and for the quarter. Smith Manufacturing Production Budget For the Months of January through March March Quarter Unit sales Plus: Desired ending inventory Total needed Less: Beginning inventory Units to produce

Explanation / Answer

2)

-4470    [14900*.30]

Jan Feb Mar quarter April units sales 3900 3200 3700 10800 4400 Ending inventory 800   [3200*.25] 925   [3700*.25] 1100 [4400*.25] 2825 1225 Total needed 4700 4125 4800 13625 5625 less:beginning inventory -975 -800 -925 -2700 -1100 untis to be produced 3725 3325 3875 10925 4525

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