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

1. For 2015, Price marketing managers project monthly sales of 420,000 12-ounce bottles and 170,000 1-gallon containers. Average selling prices are estimated at $ 0.20 per 12-ounce bottle and $ 1.50 per 1-gallon container. Prepare a revenues budget for Price, Inc., for the year ending December 31, 2015.
2. Price begins 2015 with 890,000 12-ounce bottles in inventory. The vice president of operations requests that 12-ounce bottles ending inventory on December 31, 2015, be no less than 680,000 bottles. Based on sales projections as budgeted previously, what is the minimum number of 12-ounce bottles Price must produce during 2015?
3. The VP of operations requests that ending inventory of 1-gallon containers on December 31, 2015, be 240,000 units. If the production budget calls for Price to produce 1,900,000 1-gallon containers during 2015, what is the beginning inventory of 1-gallon containers on January 1, 2015?

  • CreatedMay 14, 2014
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