Super Paint has been produced since the company began production. The sales level of this product has been rather stagnant for the last 5 years, and that trend is expected to continue in the future.
You have made the following conclusions about the two different products: Super Paint
• Sales growth in units will continue to be stagnant.
• The more recent years are more representative of continuing unit sales than years in the further past.
• Exponential Smoothing will be an appropriate unit sales projection method to use.
Stupendous Paint
• Unit sales growth will continue on its current increasing trend
• An exponential growth function with the year being the independent variable and the sales volume being the dependent variable will be an appropriate sales projection method.
2006 DIRECT MATERIAL AND INVENTORY BUDGET INFORMATION
The production department worked in conjunction with both the sales and purchasing departments in developing desired projected inventory levels for December 31, 2006. Information regarding beginning and desired ending inventories for 2006 are as follows:
Hint: Remember that each gallon of paint requires two pounds of pigment.
2006 DIRECT LABOR BUDGET INFORMATION