Maurice Tutor
$15/per page/Negotiable
(Sales budget) Pataky Co.’s sales manager estimates that 2,000,000 units of product RI#698 will be sold in 2011. The product’s selling price is expected to decline as the result of technology changes during the year and estimates of the sales price are as follows:
|
1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
|
$17 |
$16 |
$14 |
$12 |
In talking with customers, the sales department discovered that sales quantities per quarter could vary substantially. Thus, the sales manager has prepared the following three sets of quarterly sales projections:
| Â |
1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
Total |
|
Scenario A |
600,000 |
300,000 |
640,000 |
460,000 |
2,000,000 |
|
Scenario B |
400,000 |
700,000 |
250,000 |
650,000 |
2,000,000 |
|
Scenario C |
530,000 |
480,000 |
800,000 |
190,000 |
2,000,000 |
If Pataky’s sales department is able to influence customers, which of the potential sales scenarios would be most profitable for the company? Would that scenario possibly cause the company any difficulties?
(Production budget) Seguin Inc. has the following projected unit sales for the first four months of 2011:
|
January |
102,400 |
|
February |
96,000 |
|
March |
128,000 |
|
April |
153,600 |
Company policy is to have an ending monthly inventory equal to 5 percent of next month’s estimated sales; however, this criterion was not in effect at the end of 2010.Ending inventory at that time was 7,000 units. Determine the company’s production requirements for each month of the first quarter of 2011.