Question
A company manufactures and sells two models of watches, Simple and Complex. It expects to sell 3,200 units of Simple and 1,300 units of Complex
A company manufactures and sells two models of watches, Simple and Complex. It expects to sell 3,200 units of Simple and 1,300 units of Complex in 2020. The following estimates are given for 2020: Per unit Selling price Direct materials cost Simple ($) 200 Complex ($) 500 60 80 Direct manufacturing labor cost 90 180 Manufacturing overhead 40 110 The company had an inventory of 230 units of Simple watch and 85 units of Complex watch at the end of 2019. It has decided that as a measure to counter stock outages, it will maintain ending inventory of 370 units of Simple watch and 200 units of Complex watch. Each Complex watch requires one unit of special spring which has to be imported at a cost of $11. There were 140 units of special spring in stock at the end of 2019. The management does not want to have any stock of special spring at the end of 2020. Required: (4 points each) A) How many units of Simple watches are expected to be produced in 2020? Enter your numeric answer in the given answer box. Do not enter comma and decimal point, if any. B) What is the amount budgeted for purchase of special spring in 2020? Enter your numeric answer in the given answer box. Do not enter currency sign, comma, and decimal point, if any
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