Question

Custom Embroidering, Inc. (CEI) manufactures baseball hats with the Arizona State University Sun Devil logo embroidered on the hats. Even though the baseball hats come in a variety of colors, the hats are considered to be a single product. Each hat sells for $20 and CEI has forecasted quarterly sales for 2020 are as follows:

1^st Quarter         $150,000          7,500
2^nd Quarter        $200,000          10,000
3^rd Quarter        $225,000          11,250
4^th Quarter        $175,000          8,750

           Finished goods inventory is maintained at 50% of the following quarter’s sales. How many units need to be produced during the first quarter 2020? (The January 1, 2020 beginning inventory is 3,750 units)

a. 8750

b. 16,500

c.6,250

d. 12,500

Answer 1

ANSWER TO THE QUESTION

UNITS TO BE PRODUCED IN THE FIRST QUARTER IS (a) 8750 UNITS

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