Assume you have developed and tested a prototype electronic product and are about to start

your new business. You purchase pre-programmed computer chips at $70 per unit. Other

component costs include: plastic casings at $15 per unit and assembly hardware at $5 per

unit. Direct labor costs are $15 per hour and

three units

can be produced per hour. You

intend to sell each unit at a 50 percent mark-up over the total costs of producing each unit.

The plan is to produce 500 product units per month in January, February, and March. Sales

are expected to be: 200 units in January, 400 units in February, and 800 units in March.

make an inventories schedule for January, February, and March.

Inventories Schedule:

January February

March

Beginning finished goods

Production

Materials

Direct labor

Additions

Total (beg. + additions)

Less: cost of goods sold

Ending finished goods