The budget components for birk company for the quarter ended june 30 appear below. birk sells trash cans for $12 each. budgeted production for the next three months is: april 26,000 units may 46,000 units june 29,000 units birk desires to have trash cans on hand at the end of each month equal to 20 percent of the following month’s budgeted sales in units. on march 31, birk had 4,000 completed units on hand. five pounds of plastic are required for each trash can. at the end of each month, birk desires to have 10 percent of the following month’s production material needs on hand. at march 31, birk had 13,000 pounds of plastic on hand. the materials used in production costs $0.60 per pound. each trash can produced requires 0.10 hours of direct labor. compute the cost of the plastic inventory at the end of may.

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.