Question
Nantucket Industries manufactures and sells two models of watches, Prime and Luxuria. It expects to sell 4000 units of Prime and 1700 units of
Nantucket Industries manufactures and sells two models of watches, Prime and Luxuria. It expects to sell 4000 units of Prime and 1700 units of Luxuria in 2020.The following estimates are given for 2020: Selling price Direct materials Direct labor Manufacturing overhead Prime Luxuria $200 $500 40 50 60 50 190 120 Nantucket had an inventory of 220 units of Prime and 115 units of Luxuria at the end of 2019. It has decided that as a measure to counter stock outages it will maintain ending inventory of 390 units of Prime and 220 units of Luxuria. Each Luxuria watch requires one unit of Crimpson and has to be imported at a cost of $10. There were 140 units of Crimpson in stock at the end of 2019. The management does not want to have any stock of Crimpson at the end of 2020. How many units of Prime watches must be produced in 2020? A. 4390 units B. 4000 units C. 3780 units D. 4170 units
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