Potts, Inc., bottles and distributes mineral water from the company's natural springs in northern Oregon. Potts markets two products: 12-ounce disposable plastic bottles and 1-gallon reusable plastic containers.

Requirements

1. For 2021, Potts marketing managers project monthly sales of 410,000 12-ounce bottles and 170,000 1-gallon containers. Average selling prices are estimated at $0.90 per 12-ounce bottle and $1.25 per 1-gallon container. Prepare a revenues budget for Potts, Inc., for the year ending December 31, 2021.

2. Potts begins 2021 with 990,000 12-ounce bottles in inventory. The vice president of operations requests that 12-ounce bottles ending inventory on December 31, 2021, be no less than 630,000 bottles. Based on sales projections as budgeted previously, what is the minimum number of 12-ounce bottles Potts must produce during 2021?

3. The VP of operations request that ending inventory of 1-gallon containers on December 31, 2021, be 220,000 units. If the production budget calls for Potts to produce 1,800,000 1-gallon containers during 2021, what is the beginning inventory of 1-gallon containers on January 1, 2021?

Production Budget (in Units)

For the Year Ending December 31, 2021