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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:


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.

Number of planters to be sold
January 3900
February 3200
March 3700
April 4400
May 4900

Required:
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.

Respuesta :

jepessoa

Answer:

              Production budget for the first quarter of 202x

Particulars               January     February     March         Total

Expected sales        3,900        3,200          3,700          10,800

Required ending      800           925             1,100           2,825

inventory

Less beginning        975            800             925            2,700

inventory

Required number    3,725          3,325          3,875         10,925

of units to be produced

The production budget for the first quarter includes the months of January, February and March. It doesn't include any materials, since they are included in the materials purchase budget.

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