Bambino Sporting Goods makes baseball gloves that are very popular in the spring

Question

Bambino Sporting Goods makes baseball gloves that are very popular in the spring and early summer season. Units sold are anticipated as follows:

  

  

If seasonal production is used, it is assumed that inventory will 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 30,900 units over four months at a level of 7,725 per month.

  

What is the ending inventory at the end of each month? Compare the unit sales to the units produced and keep a running total. (Leave no cells blank - be certain to enter "0" wherever required.)

  

  

If the inventory costs $16 per unit and will be financed at the bank at a cost of 12 percent, what is the monthly financing cost and the total for the four months? (Use 1.0 percent as the monthly rate.) (Leave no cells blank - be certain to enter "0" wherever required.)

  

Bambino Sporting Goods makes baseball gloves that are very popular in the spring and early summer season. Units sold are anticipated as follows:

Explanation / Answer

a.Ending Inventory at the end of each Month

b.Calculation of Inventory Finance cost

Month Opening Inventory Units Produced Units available for sale Units sold Closing Inventory Change in inventory=Units produced-Units sold March 0 7725 7725 3150 4575 0 April 4575 7725 12300 7150 5150 575 May 5150 7725 12875 11300 1575 -3575 June 1575 7725 9300 9300 0 -1575 Total 30900 30900

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