60.1K

Verified Solution

Link Copied!

Carlos Cavalas, the manager of Echo Products' Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 67,320 units during the year, but by September 30 only the following activity had been reported Inventory, January1 Production Sales Inventory, September 30 72,900 61,200 11,700 The division can rent warehouse space to store up to 30,200 units. The minimum inventory level that the division should carry is 2,700 units. Mr. Cavalas is aware that production must be at least 7,020 units per quarter in order to retain a nucleus of key employees. Maximum production capacity is 44,800 units per quarter Demand has been soft, and the sales forecast for the last quarter is only 20,200 units. Due to the nature of the division's operations, fixed manufacturing overhead is a major element of product cost Required: 1-a Assume that the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? Required production units 1-b wil the number of units scheduled for production affect the division's reported income or loss for the Carlos Cavalas, the manager of Echo Products' Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 67,320 units during the year, but by September 30 only the following activity had been reported Inventory, January1 Production Sales Inventory, September 30 72,900 61,200 11,700 The division can rent warehouse space to store up to 30,200 units. The minimum inventory level that the division should carry is 2,700 units. Mr. Cavalas is aware that production must be at least 7,020 units per quarter in order to retain a nucleus of key employees. Maximum production capacity is 44,800 units per quarter Demand has been soft, and the sales forecast for the last quarter is only 20,200 units. Due to the nature of the division's operations, fixed manufacturing overhead is a major element of product cost Required: 1-a Assume that the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? Required production units 1-b wil the number of units scheduled for production affect the division's reported income or loss for the

Answer & Explanation Solved by verified expert

See Answer