How Many Pillows Would Be Produced Next Year by Burgandy Company?
How many pillows would be produced in the next year?
a. 10,000 pillows
b. 16,500 pillows
c. 11,250 pillows
d. 14,850 pillows
The correct answer is D.Explanation:
Based on the information provided, Burgandy Company expects to sell 15,000 pillows in the next year. Additionally, they will have 1,500 pillows in finished goods inventory at the end of the current year. Sleepgood would like to complete operations next year with at least 1,350 completed pillows in inventory and there is no ending work-in-process inventory.
To calculate the production for the next year, we can use the following formula:
Production = Expected Sales + Desired Ending Inventory - Beginning Inventory
Production = 15,000 + 1,350 - 1,500 = 14,850 pillows
Therefore, Burgandy Company would need to produce 14,850 pillows in the next year.