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Grainger Manufacturing Inc. manufactures outdoor grills. On March 31, company had 120 grills in inventory. Company's policy is to keep a grill inventory equal to 15% of next month's sales. Company expects following sales activity for the second quarter of the year:

April 800 units
May 2,000 units
June 2,600 units

Sales for July and August are expected to be 1,800 units and 1,400 units respectively. Each completed unit of finished product needs 3 pounds of heat resistant plastic material which costs $4.00 per pound. Company has determined that it requires 20% of next month's raw material on hand at end of each month. Company had 600 pounds of plastic on hand at end of March.

A. Make production budget for second quarter of the year.
B. Make budget for second quarter of year illustrating projected cost of direct materials (plastic) which will be required.

Project Management, Management Studies

  • Category:- Project Management
  • Reference No.:- M932394

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