Nantucket Industries manufactures and sells two models of watches,Prime and Luxuria.It expects to sell 3,200 units of Prime and 1,300 units of Luxuria in 2019.The following estimates are given for 2019:

Nantucket had an inventory of 230 units of Prime and 85 units of Luxuria at the end of 2018.It has decided that as a measure to counter stock outages it will maintain ending inventory of 370 units of Prime and 200 units of Luxuria.
Each Luxuria watch requires one unit of Crimpson and has to be imported at a cost of $11.There were 140 units of Crimpson in stock at the end of 2018.The management does not want to have any stock of Crimpson at the end of 2019.
How many units of Prime watches must be produced in 2019?

Question

Nantucket Industries manufactures and sells two models of watches,Prime and Luxuria.It expects to sell 3,200 units of Prime and 1,300 units of Luxuria in 2019.The following estimates are given for 2019:

Nantucket had an inventory of 230 units of Prime and 85 units of Luxuria at the end of 2018.It has decided that as a measure to counter stock outages it will maintain ending inventory of 370 units of Prime and 200 units of Luxuria.
Each Luxuria watch requires one unit of Crimpson and has to be imported at a cost of $11.There were 140 units of Crimpson in stock at the end of 2018.The management does not want to have any stock of Crimpson at the end of 2019.
How many units of Prime watches must be produced in 2019?

Quizplus · Accepted Answer

Number of units of Prime to be produced = [3,200 units (Estimated sales)+ 370 units (Budgeted ending inventory)- 230 units (Opening inventory)] = 3,340 units.

Nantucket Industries Manufactures and Sells Two Models of Watches,Prime and Luxuria.It