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Carlos Cavalas, the manager of Echo Products' Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian
Carlos Cavalas, the manager of Echo Products' Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 64, 900 units during the year, but by September 30 only the following activity had been reported: The division can rent warehouse space to store up to 30, 400 units. The minimum inventory level that the division should carry is 1, 300 units Mr. Cavalas is aware that production must be at least 7, 920 units per quarter in order to retain a nucleus of key employees Maximum production capacity is 45, 600 units per quarter. Demand has been soft, and the sales forecast for the last quarter is only 17, 500 units. Due to the nature of the division's operations, fixed manufacturing overhead is a major element of product cost. Required: a. Assume that the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? Required production units
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