Antonio Banderes & Scarves makes headear that is very popular in the fall-winter

Question

Antonio Banderes & Scarves makes headear that is very popular in the fall-winter season, Units sold are anticipated as Montly Unit Sales October November December 100 2,100 200 January3200 0.800 Total units sold f seasonal produetion is used, it is assumed that inventory will directy match sales for each month and there wil be no inventory buildup However, Antonio decides to go with level production to avoid being out of marchandise. He wil produce the 10,000 bms over four months at a level of 2,050 per month a.. what is te endng imertery at th, end of each month? Cempare the ur sales to the units produced and keep s nning total. October unts anuary b.ifre nventory costs S2 per unit and wil be financed atmebank at a cost o, 12 percent, what is re mormlynarorgcoat and he tot" thfour months? (U" , per " al the month, nr.) Financing Cost October January Total financing cost

Explanation / Answer

Month Opening Inventory No of units produced No of units sold Ending Inventory October - 2650 1100 1550 November 1550 2650 2100 2100 December 2100 2650 4200 550 January 550 2650 3200 0 Months opening inventory closing inventory avg Price Amount Finance Rate Finance Cost October - 1550 0+1550/2 = 775 12 9300 1% 9 Noveber 1550 2100 1825 12 21900 1% 219 December 2100 550 1325 12 15900 1% 159 January 550 0 275 12 3300 1% 33 Total 420

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