Part $3$

Kelly expects to have the following sales occur in the first three months of next year:

Units Sold

January $3,500$

February $7,500$

March $13,000$

Total $24,000$

If seasonal production is used, it is assumed that inventory will match sales for each month and there will be no inventory buildup. The production manager thinks the above assumption is too optimistic and decides to go with level production to avoid being out of merchandise.

a$)$ Use level production to calculate inventory at the end of each month? Beginning inventory in January is $4,800$ units.

b$)$ If the inventory costs $$8$ per unit and will be financed through the bank at $6$ percent per annum, what is the monthly financing cost and the total financing cost for all three months?