After a successful engagement consulting for Linden-Cola, their CFO made the shrewd decision to hire your team on as employees in the soft-drink division. Your new project manager has grown anxious about the firm's inventory levels after attending various meetings on the sales growth projections for the flagship product. After his counterpart in marketing showcased the firm's sales budget, your product manager began to wonder whether budgets would be helpful in operations. Upon returning from his most recent meeting, he asked you to provide him a production & inventory budget along with budgets for the direct materials cost, direct labor cost, and overhead. Remembering that your consulting firm also would provide an executive summary, you decide it's best to include it as part of the deliverable to explain how you calculated the dollar amount of the ending finished goods inventory and to walk through the highlights of the other budgets provided. Additionally, the marketing department is usually fairly accurate but you know the quarterly growth projection was listed as 5%3%. As such, some of your new colleagues have mentioned the need for a sensitivity analysis in the deliverables in the event that sales growth is high or low. You know the marketing department projects Q1 sales to be 250,000 packs and does not plan to deviate from the $4.44 price per soda pack. As is customary in manufacturing, your project manager prefers to preserve 25% of next quarter's projected sales as the ending finished goods inventory. Although this buffer against sales volume spikes is currently 30,000 packs starting Q1, your project manager shared that he believes 60,000 packs is more consistent with demand in future years (and thus is the level at which the firm would like to end Q4). Raw materials cost is expected to remain steady over the year at a cost of $0.22 per unit (where there is 6 units of raw material per pack). As the firm also wants to preserve a buffer of 25% of units needed next quarter, your project manager anticipates increasing the buffer from 200,000 units at the start of Q1 to 400,000 units by Q4 end. ACCELERATED/EVENING PROGRAMS ` Page 2 of 2 The work force at Linden-Cola is relatively efficient, where they are able to assemble and ready 100 soda packs in just 30 minutes. It is because of this efficiency that Linden-Cola offers a generous wage of $18.27 per line worker. The firm also pays a significant amount in overhead in order to achieve operational efficiencies. Variable and fixed overhead rates from the previous year (which is also the best quarterly estimates for this year) was $99.12 per direct labor hour and $69,480 respectively. You project manager has given you a week to provide the analysis but is anxious to know the results because space constraints currently limit the loading warehouse to 75,000 packs of soda. If the space constraint is exceeded, it could present a safety concern for the workers because of how high the packs would need to be stacked. If there are safety issues such as this that arise, make sure to note it in the executive summary along with the other important information.