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?

Question

Quizplus · Accepted Answer

The total units in inventory at the end of January will be:

Beginning Inventory + Units produced – Units sold
= 10,000 + 20,000 – 15,000
= 15,000 units

The dollar value of ending inventory will be:

15,000 units x $500/unit
= $7,500,000

Therefore, the answer is B, between $5,000,000 and $10,000,000.

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