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Actual sales volume 420,000 gallons 268,200 gallons
Number of hourly employees 29 21
Supervisors (one per each eight hourly
employees) 4 3
Raw material prices
Cans 40¢ each 40¢ each
Pigment $2.75 per pound $3.75 per pound
Raw material usage
Cans one per gallon one per gallon
Pigment two pounds per gallon two pounds per gallon
Direct labor rate $8.25 per hour $8.25 per hour
2006 PROJECTED SALES INFORMATION
The sales department feels very good about the prospects for 2006. The
reputation of the new product, Stupendous Paint, has increased
significantly due to effective adverting in the past few years. The sales
department is ready to launch a major advertising campaign which is
expected to result in the trend of the last three year to continue for the
Stupendous brand even with a small price increase per gallon.
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