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Author Question: Go-Spa Enterprises is a portable hot tub manufacturer. The company produces both 2-person and ... (Read 22 times)

krabuske

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Go-Spa Enterprises is a portable hot tub manufacturer. The company produces both 2-person and 4-person hot tubs. John Ireland, the company's sales manager, prepared the following sales forecast for 2021. The forecasted sales prices include a 5 percent increase in the 2-person spa price and a 10 percent increase in the 4-person spa price, to cover anticipated increases in raw materials prices.

Units
Sales Price1st Quarter2nd Quarter3rd Quarter4th Quarter
 2-person spa$1,250500500400600
 4-person spa$2,600200100100200
Required:

a.Prepare Go-Spa's sales budget for 2021. Omit the heading.
b.On December 31, 2020, Go-Spa had 80 2-person spas in stock—fewer than the desired
inventory level of 100, based on the following quarter's sales. The company has budgeted for sales of 450 2-person spas in the first quarter of 2022. Prepare the 2021 production budget for 2-person spas. Omit the heading.

c.Each 2-person spa requires a pump motor, which Go-Spa purchases for $160. On
December 31, 2020, Go Spa had 400 pump motors in inventory. Damage during the installation process results in a standard quantity of 1.2 motors per spa. Because of recent delivery problems, Go-Spa wants to maintain an ending inventory equal to 50 percent of the following quarter's production needs. Since the supplier has assured Go-Spa that the delivery issues will be resolved by the end of December, Go-Spa wants only 300 motors in inventory on December 31, 2021. Prepare the purchases budget for motors for 2021.


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Marked as best answer by krabuske on Feb 5, 2023

butterfly17

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krabuske

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Reply 2 on: Feb 5, 2023
Wow, this really help


upturnedfurball

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

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