The Theory of Constraints and Throughput Accounting 4. Anya, we have to manage our inventory better!" Trevon, plant manager at Durhamite Co., said to one of the floor supervisors. These high levels of inventory have to be hurting our profitability. We are not concentrating on throughput." "Well," Anya replied, I talked to Collin in accounting, and he showed me the num- bers-look. Our sales are constant at 40 units a month, and for the last three months we have produced 40, 50, and 80 units. Our revenue is $2,800 per unit, our materials costs are $1,000 per unit, and our conversion costs are stable at $80,000 per month. The numbers work out so that we do better, profitwise, when we increase inventory." Required: As Anya, prove to Trevon (by preparing a GAAP-based P&L statement) that building inventory is profitable. As Trevon, prove to Anya that building inventory is detrimental to Durhamite. Prepare a P&L statement based on throughput and explain the contradiction with GAAP-based results. Assume that selling, general, and administrative expenses are constant at $7,500 per month