Question

Refer to the information regarding Stillwater Designs on the previous page. Stillwater Designs needs a production budget for each product (representing the amount that must be outsourced to manufacturers located in Asia). Beginning inventory of S12L7 for the first quarter of 2012 was 340 boxes. The company’s policy is to have 20 percent of the next quarter’s sales of S12L7 in ending inventory. Beginning inventory of S12L5 was 170 boxes. The company’s policy is to have 30 percent of the next quarter’s sales of S12L5 in ending inventory.
Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells for $ 475, and the S12L5 sells for $ 300. Projected sales (number of speakers) for the coming five quarters are as follows:
The vice president of sales believes that the projected sales are realistic and can be achieved by the company.
Required:
Prepare a production budget for each quarter for 2012 and for the year in total.


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  • CreatedSeptember 22, 2015
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