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Bambino Sporting Goods makes baseball gloves that are very popular in the spring and early summer season. Units sold are anticipated as follows: Monthly Unit Sales March April May June 3,900 7,900 12,800 10,800 35,400 Total units sold If seasonal production is used, it is assumed that inventory will directly match sales for each month and there will be no inventory buildup. The production manager thinks the preceding assumption is too optimistic and decides to go with level production to avoid being out of merchandise. He will produce the 35,400 units over four months at a level of 8,850 per month. a. What is the ending inventory at the end of each month? Compare the unit sales to the units produced and keep a running total. Ending Inventory March April May June 4,950 units 5,900 units 1,950 units 0 units 30 B is incorrect please help!!
If seasonal production is used, it is assumed that inventory will directly match sales for each month and there will be no inventory buildup. The production manager thinks the preceding assumption is too optimistic and decides to go with level production to avoid being out of merchandise. He will produce the 35,400 units over four months at a level of 8,850 per month. a. What is the ending inventory at the end of each month? Compare the unit sales to the units produced and keep a running total March April May June Ending Inventory 4,950 units 5,900 units 1,950 units 0 units b. If the inventory costs $16 per unit and will be financed at the bank at a cost of 6 percent, what is the monthly financing cost and the total for the four months? (Use .5 percent as the monthly rate.) Inventory March April May June Total financing cost Financing Cost 3,960 4,720 1,560 0 10,240
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