Question

Cleary 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: E: (Click the icon to view additional information.) Inventory at the start of the year was 640 planters. The desired inventory of planters at the end of each month should be equal to 20% of the following month's budgeted sales. Each planter requires four pounds of polypropylene (a type of plastic). The company wants to have 10% of the polypropylene required for next month's production on hand at the end of each month. The polypropylene costs $0.25 per pound. Read the requirements Х Data Table Requirement 1. Prepare a production budget for each month in the first quarter of the year, including production in units for each month and for the quarter. Cleary Manufacturing Production Budget For the Months of January through March January February March Quarter Unit sales Plus: Desired ending inventory Total needed Number of planters to be sold 3,200 January February March 3,600 Less: Beginning inventory 3,100 Units to produce April 4.500 May ..... 4.700 Print Done

Answer 1

*The production budget- It calculates the number of units of products that must be manufactured and is derived from a combination of the sales forecast and the planned amount of finished goods inventory to on hand.

*Units to be Produced = Expected Unit Sales + Units in Desired Ending Inventory - Units in Beginning Inventory.

Cleary Manufacturing
Production Budget
For the Month of January through March
	January	February	March	Quarter
Unit Sales	3,200	3,600	3,100	9,900
Plus: Desired Ending Inventory	720	620	900	900
Total Needs	3,920	4,220	4,000	10,800
Less: Beginning Inventory	640	720	620	640
Units to produce	3,280	3,500	3,380	10,160
Workings:
20% on the following month of sale.
Desired Ending Inventory =	[3,600*20%]	[3,100*20%]	[4,500*20%]
	720	620	900
20% on the month of sale.
Beginning Inventory=	Given	[3,600*20%]	[3,100*20%]
	640	720	620

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