Reference no: EM132620074

Question - Fondi Inc., bottles and distributes mineral water from the company's natural springs in Italy. Fondi markets two products: 12-ounce disposable plastic bottles and 1-gallon reusable plastic container. A government rebate of $0.25 when customers return the reusable plastic containers.

Required -

1. For 2018, Fondi marketing managers project weekly sales of 50,000 12-ounce bottles and 85,000 1-gallon containers. Average selling prices are estimated at $0.90 per 12-ounce bottle and $1.60 per 1-gallon container. Revenues budget for Fondi Inc., for the year ending December 31, 2018. What would revenue be if Average selling price were reduced by 10%?

2. Fondi begins 2018 with 980,000 12-ounce bottles in inventory. The vice president of operations requests that 12-ounce bottles ending inventory on December 31, 2018, be no less than 760,000 bottles. Based on sales projections as budgeted previously, what is the minimum number of 12-ounce bottles Fondi must produce during 2018?

3. The VP of operations requests that ending inventory of 12-ounce bottles on December 31, 2018, be 300,000 units. If the production budget calls for Fondi to produce 1,200,000 12-ounce bottles during 2018, what is the beginning inventory of 12-ounce bottles on January 1, 2018? Is there a situation when beginning inventory can be negative? Why or Why not?