Question

Answer the following questions using the information below:

Kason Inc., expects to sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2016:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units

*29) How many pool cues need to be produced in 2016?*
A) 22,500 cues
B) 22,000 cues
C) 20,500 cues
D) 19,500 cues

Answer 1

To determine the number of pool cues that need to be produced in 2016, subtract the ending inventory from the total number of cues sold.

Step-by-step explanation:

To determine the number of pool cues that need to be produced in 2016, we need to calculate the total number of cues sold and deduct the ending inventory. The total number of cues sold is given as 20,000. The ending inventory is 2,500 units.So, the equation will be: Total cues sold = Beginning inventory + Cue produced - Ending inventory.Plug in the values: 20,000 = 24,000 + Cue produced - 2,500.Rearrange the equation and solve for Cue produced: Cue produced = 20,000 - 24,000 + 2,500 = -1,500.Since you can't produce a negative number of cues, the correct answer is D) 19,500 cues.