Question

Problem 1 See Pages 160 - 165 Nature Solutions Inc., produces an energy drink that is very popular in the fall-winter season Units sold are anticipated as: October November December January Total 4.800 8.640 17.230 13,440 44,160 units 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, Nature Solutions Inc. decides to go with level production to avoid being out of merchandise. The company will produce the 14, 150 units over four months at a level of 11,040 per month Part What is the ending inventory in units at the end of each month? Complete the following table (Hint: September's ending inventory=0 therefore, October's beginning inventory=0) Bezirning Inventory White Produced Units Sold Ending Inventory October November December Januar

Answer 1

Beginning Inventory October November December January Units Produced Units Sold 0 11,040 6,240 11,040 8,640 11,040 2,4001 11,040 Ending Inventory 4,800 6,240 8,640 8,640 17,280 2,400 13,440 3741 October November December January Total Financing Cost Ending Inventory (# of Units) Total Inventory Cost $ Inventory Financing Cost $ 6,240 62,400 8,640 86,400 518 2,400 24,000 144 o 1,037 Inventory Cost per Unit Inventory Financing Cost $ 10.00 0.60%

Beginning Inventory October November December January 1-F3 Units Produced 11040 =D3 =D4 =D5 Units Sold 4800 8640 17280 13440 Ending Inventory =C3+D3-E3 =C4+D4-E4 =C5+D5-E5 =C6+D6-E6 =F4 =F5 October November December January Total Financing Cost Ending Inventory (# of Units) Total Inventory Cost $ Inventory Financing Cost $ =F3 =C9*$C$15 =D9*$C$16 =F4 =C10*$C$15 =D10*$C$16 =F5 =C11*$C$15 =D11*$C$16 =F6 =C12*$C$15 =D12*$C$16 =SUM(E9:E12) Inventory Cost per Unit 10 Inventory Financing Cost 0.006