Suppose Steel CitySteel City manufactures cast iron skillets. One model is a 10-

Question

Suppose

Steel CitySteel City

manufactures cast iron skillets. One model is a 10-inch skillet that sells for $ 24

Steel City projects sales of 750 10-inch skillets per month. The production costs are $8per skillet for direct materials, $3 per skillet for direct labor, and $4 per skillet for manufacturing overhead. Steel City has 55 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$1,100 per month.How many 10-inch skillets should Steel CitySteel City produce in July?

what is the correct answer and how do I find this out on my own

Explanation / Answer

Calculate how many 10- inch skillets should steel city produce in july :

Production units = Sales units+desired ending inventory-beginning inventory

= 750+(750*30%)-55

Proudction units = 920 units

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