Sleep Country Company produces and sells pillows. It expects to sell 10,000 pillows the coming year, and it had 1,000 pillows in the finished goods inventory at the end last year. The company would like to complete operations in the coming year with at least 1,250 completed pillows in finished goods inventory. There is no ending work-in-process inventory. The pillows sell for $5 each. How many pillows should be produced in the coming year?

Question

Quizplus · Accepted Answer

The company expects to sell 10,000 pillows and wants to end the year with 1,250 pillows in finished goods inventory. It started the year with 1,000 pillows in finished goods inventory. So, the company needs to produce 10,000 + 1,250 - 1,000 = 10,250 pillows in the coming year.

Sleep Country Company Produces and Sells Pillows