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In: Operations Management

SmithSmith Foods produces specialty soup sold in jars. The projected sales in dollars and jars for...

SmithSmith

Foods produces specialty soup sold in jars. The projected sales in dollars and jars for each quarter of the upcoming year are as? follows:

Total sales revenue

Number of jars sold

1st quarter. . . .

$181,000

153,000

2nd quarter. . . .

$213,000

180,000

3rd quarter. . . .

$257,000

212,500

4th quarter. . . .

$194,000

163,500

SmithSmith

anticipates selling

226 comma 000226,000

jars with total sales revenue of

$ 266 comma 000$266,000

in the first quarter of the year following the year given in the preceding table.

SmithSmith

has a policy that the ending inventory of jars must be

3030?%

of the following? quarter's sales.

Requirement

Prepare a production budget for the year that shows the number of jars to be produced each quarter and for the year in total.

Prepare the production budget by first calculating the total units? needed, then calculate the units to produce.

Smith Foods

Production Budget

For the Quarters in the Upcoming Year

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Year

Unit sales

153,000

180,000

212,500

163,500

709,000

Plus: Desired ending inventory

54,000

63,750

49,050

67,800

67,800

Total needed

207,000

243,750

261,550

231,300

776,800

Less: Beginning inventory

45,900

54,000

63,750

69390

233040

Units to produce

161,100

189,750

197,800

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keosha answered 8 months ago
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