Annual Cost of Inventory
A company manufactures and sells a seasonal product.
Instructions: Based on the sales forecast that follows:
1. Calculate a level production plan, quarterly ending inventories, and average quarterly inventories.Assume that the average quarterly inventory is the average of the starting and ending inventory for the quarter. If inventory carrying costs are $3 per unit per quarter..
2. What is the annual cost of carrying this inventory? (Opening and ending inventories are zero.)
Quarter 1Quarter 2Quarter 3Quarter 4Totals
Sales1000200030002000
Production
Ending Inventory
Average Inventory
Inventory Cost
Use spreadsheet to show your work and submit to drop box