15 Points Part 1 Osborne Manufacturing Part 1: Osborne Manufacturing produces self-watering planters for use in upscale retail establishments. Sales Production Budget projections for the first five months of the upcoming year show the estimated unit sales of the planters each month For the Months of January through March to be as follows: Number of planters to be sold January February March Quarter January . ... . . 3,400 Unit sales February . . . . . 3,800 Plus: Desired ending inventory March . . . . ... . 3,300 April . . . . . . . . . 4,900 Total needed May . . . . . . . . . 4,600 Less: Beginning inventory Inventory at the start of the year was 850 planters. The desired inventory of planters at the end of each month Units to produce should be equal to 25 % of the following month's budgeted sales. Each planter requires three pounds of polypropylene (a type of plastic). The company wants to have 20% of the polypropylene required for next month's production on hand at the end of each month. The polypropylene costs $0.20 per pound. Part 2 Osborne Manufacturing 1. Prepare a production budget for each month in the first quarter of the year, including production in units for Direct Materials Budget each month and for the quarter. For the Months of January through March 2. Prepare a direct materials budget for the polypropylene for each month in the first quarter of the year, including the pounds of polypropylene required and the total cost of the polypropylene to be purchased. The beginning January February March Quarter inventory for direct materials for start of the year is 2,100. Units to be produced Multiply Quantity of direct materials needed by: per unit Quantity needed for production Plus: Desired ending inventory of direct materials Total quantity needed Beginning inventory of direct Less: materials Quantity to purchase Multiply Cost per pound by: Total cost of direct material purchases