The selected answer is not exactly the correct one. Suppose Cook Pro manufacture

Question

The selected answer is not exactly the correct one.

Suppose Cook Pro manufactures cast iron skillets. One model is a 10-inch skillet that sells for $24. Cook Pro projects sales of 525 10-inch skillets per month. The production costs are $7 per skillet for direct materials, $4 per skillet for direct labor, and $6 per skillet for manufacturing overhead. Cook Pro has 35 10-inch skillets in inventory at the beginning of July but wants to have an ending inventory equal to 20% of the next month's sales. Selling and administrative expenses for this product line are $1,800 per month. How many 10-inch skillets should Cook Pro produce in July? OA. 525 skillets OB. 665 skillets O C. 595 skillets ?D. 630 skillets

Explanation / Answer

Sales each month = 525 units

Beginning inventory = 35

Ending inventory = 525*20% = 105

Production in units in July = Sales in July + Ending inventory - Beginning inventory

= 525 + 105 - 35

= 595

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