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. 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.

Question

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.  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.

Quizplus · Accepted Answer

The Answer of 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.  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.

Go-Spa Enterprises Is a Portable Hot Tub Manufacturer