Rouse Manufacturing produces self-watering planters for use in upscale retail es

Question

Rouse 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 o he year was 900 planters. The desired inventory o planters at the end o each month should be equal to 25% of the following month's budgeted sales. Each planter requ es The company wants o have 10% of the polypro ene required for next month's production on hand at the end of each month. The polypropylene costs $0.20 per pound. Read the requirements. o pounds c polypropylene a ype o plastic

Explanation / Answer

PRODUCTION BUDGET Jan Feb March QUARTER April Budgeted Sales Units 3,600 3,300 3,100 10,000 4,700 Add: Desired Ending Finished inventory 825 775 1,175 1,175 1,225 Total Needs 4,425 4,075 4,275 11,175 5,925 Less: Beginning Finished Inventory 900 825 775 900 1,175 Required Production in units 3,525 3,250 3,500 10,275 4,750 RAW MATERIAL PURCHASE BUDGET APRIL MAY JUNE QUARTER JULY Units to be produced 3,525 3,250 3,500 10,275 4,750 Multiply by: Qty required per unit 2 2 2 2 2 Quantity needed for production 7,050 6,500 7,000 20,550 9,500 Add: Desired Ending Inventory 650 700 950 950 Total needs 7,700 7,200 7,950 21,500 Less: Beginning Inventory 705 650 700 705 Purchase Units 6,995 6,550 7,250 20,795 Cost price per unit 0.20 0.20 0.20 0.20 Budgeted Purchase in $ 1,399 1,310 1,450 4,159

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