Question
Smith Manufacturing produces self-watering planters for use in upscale retail establishments. Sales projections for the first five months of the upcoming year show the
Smith 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: (Click the icon to view additional information.) Inventory at the start of the year was 850 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 four 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 Read the requirements Smith Manufacturing Production Budget For the Months of January through March January February March Quarter Unit sales 3,400 3,500 3,100 10,000 875 775 1,200 1,200 Plus: Desired ending inventory Total needed 4,275 4,275 4,300 11,200 850 875 775 850 Less: Beginning inventory 3,425 3,400 3,525 10,350 Units to produce
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