Samuelson will produce 20,000 units in January using level production. If each unit costs $500 to manufacture, what is the dollar value of ending inventory in January if beginning inventory is 10,000 units and January sales are 15,000?
A) Less than $5,000,000
B) Between $5,000,000 and $10,000,000
C) Greater than $10,000,000
D) There will be a shortage of inventory.

Question

Quizplus · Accepted Answer

Beginning Inv. + Production − Sales = Ending Inventory
10,000 + 20,000 − 15,000 = 15,000 units × $500 cost = $7,500,000

Samuelson Will Produce 20,000 Units in January Using Level Production