Bambino Sporting goods makes baseball gloves that are very popular in the spring and early summer season. Units sold are anticipated as follows;
March 3,250
April 7,250
May 11,500
June 9,500
Total 31,500
If seasonal production is used, it is assumed that inventory will be directly match sales for each month and there will be no inventory buildup
The production manager thinks the preceding assumption is too optimistic and decides to go with level production to avoid being out of merchandise. He will produce the 31,500 units over 4 months at a level of 7,875 per month.
a. What is the ending inventory at the end of each month?, Compare the units sales to the units produced and keep a running total. ( Leave no cells blank - be certain to enter (0) whenever required.
Ending Inventory
March ...........................Units
April ..........................Units
May .........................Units
June ..........................Units
b. If the inventory cost $12 per unit and will be financed at the bank at a cost of 12%, what is the monthly financing cost and the total for the 4 months? ( Use 1 percnt as the monthly rate). Leave no cells blank - be certain to enter (0) whenever required.
Inventory Financing Cost
March .................................
April ..............................
May ..................................
June ..................................
Total Financing Cost ..................................