Antonio Banderos & Scarves makes headwear that is very popular in the fall-winter season. Units sold are anticipated as follows:

Monthly Unit Sales
October	1,400
November	2,400
December	4,800
January	3,800
	12,400	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.

However, Antonio decides to go with level production to avoid being out of merchandise. He will produce the 12,400 items over four months at a level of 3,100 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
October		units
November		units
December		units
January		units

b. If the inventory costs $5 per unit and will be financed at the bank at a cost of 12 percent, what is the monthly financing cost and the total for the four months? (Use 1 percent as the monthly rate.)

	Inventory Financing Cost
October
November
December
January
Total financing cost