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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
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:
(DATA)
Number of planters to be sold
January - 3,200
February - 3,000
March - 3,500
April -4,300
May - 4,600
Inventory at the start of the year was 800 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
two 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 $0.10 per pound.
REQUIREMENTS -
(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.
(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.
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.
Stenback Manufacturing
Production Budget
For the Months of January through March
JANUARY / FEB / MARCH / QUARTER
UNIT SALES=
+ desired ending inventory=
total needed =
- beginning inventory=
units to produce =
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