1. Izumi Company sells bricks to construction contractors. As part of its budgeting procedures, the company...
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1. Izumi Company sells bricks to construction contractors. As part of its budgeting procedures, the company forecasts sales by analyzing past data. The company regressed annual tons of bricks sold on real gross domestic product growth (GDPGrowth) from 1981 to 2019. Regression output is as follows: SUMMARY OUTPUT Regression Statistics Multiple R R Square 0.934636854 0.87354605 Adjusted R Square 0.870128375 Standard Error Observations ANOVA 5125.535854 39 df SS MS F Regression 1 6714809225 6714809225 255.5966319 Significance F 3.37609E-18 Residual Total 37 972031358.4 26271117.79 38 7686840583 Coefficients Standard Error 13733.1899 744469.8094 Stat P-value Lower 95% 1505.707564 9.120755074 5.29991E-11 10682 33658 16784.04322 10682.33658 16784.04322 46566.06361 15.98738978 3.37609E-18 650118.0022 838821.6165 650118.0022 838821.6165 Upper 95% Lower 95.0% Upper 95.0% Intercept GDPGrowth a. As of 1/1/20, macroeconomic forecasters project real gross domestic product growth to be 2.00% in 2020, 2.40% in 2021, and 2.30% in 2022. As of 1/1/20, the company had 2,250 tons of bricks in finished goods inventory and no Work-in-Process inventory. The company's target ending inventory of finished goods is 10% of the expected sales for the following year. The company sells bricks for $1,500 per ton. Prepare Izumi's Sales Budget for 2020-2022. Round physical unit calculations to the nearest unit, and round dollar values to 4 digits. b. Prepare Izumi's Production Budget for 2020-2021. Round physical unit calculations to the nearest unit, and round dollar values to 4 digits. 1. Izumi Company sells bricks to construction contractors. As part of its budgeting procedures, the company forecasts sales by analyzing past data. The company regressed annual tons of bricks sold on real gross domestic product growth (GDPGrowth) from 1981 to 2019. Regression output is as follows: SUMMARY OUTPUT Regression Statistics Multiple R R Square 0.934636854 0.87354605 Adjusted R Square 0.870128375 Standard Error Observations ANOVA 5125.535854 39 df SS MS F Regression 1 6714809225 6714809225 255.5966319 Significance F 3.37609E-18 Residual Total 37 972031358.4 26271117.79 38 7686840583 Coefficients Standard Error 13733.1899 744469.8094 Stat P-value Lower 95% 1505.707564 9.120755074 5.29991E-11 10682 33658 16784.04322 10682.33658 16784.04322 46566.06361 15.98738978 3.37609E-18 650118.0022 838821.6165 650118.0022 838821.6165 Upper 95% Lower 95.0% Upper 95.0% Intercept GDPGrowth a. As of 1/1/20, macroeconomic forecasters project real gross domestic product growth to be 2.00% in 2020, 2.40% in 2021, and 2.30% in 2022. As of 1/1/20, the company had 2,250 tons of bricks in finished goods inventory and no Work-in-Process inventory. The company's target ending inventory of finished goods is 10% of the expected sales for the following year. The company sells bricks for $1,500 per ton. Prepare Izumi's Sales Budget for 2020-2022. Round physical unit calculations to the nearest unit, and round dollar values to 4 digits. b. Prepare Izumi's Production Budget for 2020-2021. Round physical unit calculations to the nearest unit, and round dollar values to 4 digits.
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