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Antonio Banderos & Scarves makes headwear that is verypopular in the fall-winter season. Units sold are anticipatedas:

  October1,650  November2,650  December  5,300  January4,30013,900units

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If seasonal production is used, it is assumed that inventorywill directly match sales for each month and there will be noinventory buildup.

However, Antonio decides to go with level production to avoidbeing out of merchandise. He will produce the 13,900 items overfour months at a level of 3,475 per month.

a.

What is the ending inventory at the end of each month? Comparethe unit sales to the units produced and keep a running total.(Leave no cells blank – be certain to enter “0” whereverrequired.)

Ending
Inventory  Octoberunits    Novemberunits    Decemberunits    Januaryunits  

b.

If the inventory costs $8 per unit and will be financed at thebank at a cost of 12 percent, what is the monthly financing costand the total for the four months? (Use 1 percent as the monthlyrate.) (Leave no cells blank – be certain to enter “0”wherever required.)

Inventory
Financing Cost  October$  November  December  January  Total financing cost$