Canceco Company produces and sells pillows. It expects to sell 10,000 pillows in the current year and had 1,000 pillows in finished goods inventory at the end of the previous year. Canceco would like to complete operations in the current year with at least 1,250 completed pillows in inventory. There is no ending work-in-process inventory. The pillows sell for $5 each.
-Refer to the figure.How many pillows would be produced in the current year?
A)10,000 pillows
B)10,250 pillows
C)11,000 pillows
D)11,250 pillows

Question

Quizplus · Accepted Answer

Canceco needs to produce enough pillows to meet the expected sales of 10,000 pillows and also increase the inventory from 1,000 to 1,250 pillows. Therefore, they need to produce 10,000 (sales) + 250 (increase in inventory) = 10,250 pillows.

Canceco Company Produces and Sells Pillows