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Rockford Filing Company makes bricks that sell in the spring and early summer season. The company projects that sales will be as follows: Units Sold
Rockford Filing Company makes bricks that sell in the spring and early summer season. The company projects that sales will be as follows: Units Sold March 15,500 April 19,100 May 23,000 Total 57,600 If seasonal production is used, 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. Required 1. Calculate the ending inventory at the end of each month? Beginning inventory in March is 7,600 units. 2. If the inventory costs $2 per unit and will be financed through the bank at 3 percent per year, what is the monthly financing cost and the total financing cost for the three months? Rockford Filing Company makes bricks that sell in the spring and early summer season. The company projects that sales will be as follows: Units Sold March 15,500 April 19,100 May 23,000 Total 57,600 If seasonal production is used, 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. Required 1. Calculate the ending inventory at the end of each month? Beginning inventory in March is 7,600 units. 2. If the inventory costs $2 per unit and will be financed through the bank at 3 percent per year, what is the monthly financing cost and the total financing cost for the three months
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