Ali makes garments that are very popular. Units sold are anticipated as:
Monthly Unit Sales
October
1100
November
3,150
December
5,500
January
4,500
Total units sold
14,250
If seasonal production is used, it is assumed that inventory will directly match sales for each month and there will be no inventory buildup.
However, Ali decides to go with level production to avoid being out of merchandise. He will produce the 14,250items over four months at a level of 2,400 per month.
What is the ending inventory at the end of each month? Compare the unit sales to the units produced and keep a running total.
Note: Leave no cells blank be certain to enter '0' wherever required.
If the inventory costs $8 per unit and will be financed at the bank at a cost of 12 percent, what are the monthly financing cost and the total for the four months? (Use 1 percent as the monthly rate.)
Note: Leave no cells blank be certain to enter '0' wherever required.