Question
Bambino Sporting Goods makes baseball gloves that are very popular in the spring and early summer season. Units sold are anticipated as follows: March 3,950
Bambino Sporting Goods makes baseball gloves that are very popular in the spring and early summer season. Units sold are anticipated as follows:
March 3,950
Apri l7,950
May 12,900
June 10,900
35,700
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 35,700 units over four months at a level of 8,925 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.(Leave no cells blank - be certain to enter "0" wherever required.)
Ending Inventory
March units
April units
May units
June units
b.If the inventory costs $12 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 1.0 percent as the monthly rate.)(Leave no cells blank - be certain to enter "0" wherever required.)
Inventory Financing Cost
March $
April
May
June
Total financing cost $
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Intermediate Microeconomics
Authors: Hal R. Varian
9th edition
978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968
