Question
Suppose Iron Handles manufactures cast iron skillets. One model is a 10-inch skillet that sells for $25. Iron Handles projects sales of 750 10-inch skillets
Suppose Iron Handles manufactures cast iron skillets. One model is a 10-inch skillet that sells for $25. Iron Handles projects sales of 750 10-inch skillets per month. The production costs are $5 per skillet for direct materials, $2 per skillet for direct labor, and $4 per skillet for manufacturing overhead. Iron Handles has 65 10-inch skillets in inventory at the beginning of July but wants to have an ending inventory equal to 30% of the next month's sales. Selling and administrative expenses for this product line are $1,400 per month. How many 10-inch skillets should Iron Handles produce in July?
A. 750 skillets
B. 975 skillets
C. 1,040 skillets
D. 910skillets
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