Question

Samuelson will produce 20,000 units in January using level production. If each unit costs $500 to manufacture, what is the dollar value of ending inventory in January if beginning inventory is 10,000 units and January sales are 15,000?

Answer 1

The dollar value of ending inventory is $7.500.000

Step-by-step explanation:

To calculate the dollar value of ending inventory you need to use the next formula:

End inventory= (Beginning inventory + production - sales).$

In this case:

- Beginning inventory: 10.000 units

- January Production: 20.000 units

- Sales: 15.000 units

End inventory= 10000+20000-15000

End inventory= 15.000 units

Dollar value= 150000 . $500= $7.500.000