Question
Suppose Chef Plus manufactures cast iron skillets. One model is a 10 inch skillet that sells for $26. Chef Plus projects sales of 650 10-inch
Suppose Chef Plus manufactures cast iron skillets. One model is a 10 inch skillet that sells for $26. Chef Plus projects sales of 650 10-inch skillets per month. The production costs are $13 per skillet for direct materials, $2 per skillet for direct labor, and $6 per skillet for manufaturing overhead. Chef Plus has 40 10-inch skillets in inventory at the beginning of July but wants to have an ending inventory equal to 30% of the next months sales. Selling and administrative expenses for this product line are $1,600 per month.
How many 10-inch skillets should Chef Plus produce in July?
A) 650
B) 885
C) 805
D) 845
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