Use the information below to answer the following question(s).
Country Heather manufactures flowerpots.It expects to sell 40,000 flowerpots in 2016.The company had enough beginning inventory of direct materials to produce 48,000 units.Beginning inventory of finished units totalled 4,000 with a target ending inventory of 5,000 units.The flowerpots sell for $6.00 and the company keeps no work-in-process inventory.Direct materials costs for each flowerpot total $2.00 while direct labour is $1.00.Factory overhead is $0.40 per flowerpot.
-How many flowerpots should Country Heather produce in 2016?

Question

Quizplus · Accepted Answer

To determine how many flowerpots Country Heather should produce, we need to take into account the following:

Expected sales = 40,000 units
Beginning inventory = 4,000 units
Target ending inventory = 5,000 units

To calculate the required production amount, we can use the following formula:

Required production = Expected sales + Target ending inventory - Beginning inventory
Required production = 40,000 + 5,000 - 4,000
Required production = 41,000

Therefore, Country Heather should produce 41,000 flowerpots in 2016 to meet expected sales and maintain the desired inventory levels.

Use the Information Below to Answer the Following Question(s)