Burgandy Company produces and sells mattresses. It expects to sell 7,000 mattresses in the current year and had 800 mattresses in finished goods inventory at the end of the previous year. Burgandy would like to complete operations in the current year with at least 900 completed mattresses in inventory. There is no ending work-in-process inventory. The mattresses sell for $500 each. How many mattresses will be produced in the current year?
A)9,450 mattresses
B)8,000 mattresses
C)6,320 mattresses
D)7,100 mattresses

Question

Quizplus · Accepted Answer

To determine the number of mattresses that need to be produced in the current year, we will use the following formula:

Expected sales + desired ending inventory - beginning inventory = production needs

Expected sales = 7,000
Desired ending inventory = 900
Beginning inventory = 800

So, 7,000 + 900 - 800 = 7,100 mattresses need to be produced in the current year.

Therefore, the best choice is D.

Burgandy Company Produces and Sells Mattresses