Reference no: EM133092572

Question - Pure Water Company bottles and distributes mineral water from the company's natural springs in northern Sarawak. Pure Water markets two products: twelve-ounce disposable plastic bottles and four-gallon reusable plastic containers. For 2021, Pure Water marketing managers project monthly sales of 400,000 twelve-ounce bottles and 100,000 four-gallon containers. Average selling prices are estimated at $0.25 per twelve-ounce bottle and $1.50 per four-gallon container. Pure Water begins 2021 with 90,000 twelve-ounce bottles in inventory. The production manager requests that twelve-ounce bottles ending inventory on December 31, 2021, be no less than 60,000 bottles. The production manager requests that ending inventory of four-gallon containers on December 31, 2021, be 20,000 units.

Required -

a. Prepare a revenues budget for Pure Water for the year ending December 31, 2021.

b. Based on sales projections as budgeted previously, what is the minimum number of twelve-ounce bottles Pure Water must produce during 2021?

c. If the production budget calls for Pure Water to produce 120,000 four-gallon containers during 2021, what is the beginning inventory of four-gallon containers on January 1, 2021?