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In: Accounting

Burgandy Company produces and sells mattresses. It expects to sell 7,000 mattresses in the current year...

Burgandy Company produces and sells mattresses. It expects to sell 7,000 mattresses in the current year and had 800 mattresses in finished goods inventory at the end of the previous year. Burgandy would like to complete operations in the current year with at least 900 completed mattresses in inventory. There is no ending work-in-process inventory. The mattresses sell for $500 each. How many mattresses will be produced in the current year?

a.9,450 mattresses

b.6,320 mattresses

c.7,100 mattresses

d.8,000 mattresses

Solutions

Expert Solution

Answer)

Calculation of number of mattresses to be produced in the current year

Number of mattresses to be produced in the current year = Number of mattresses in finished goods expected to be maintained at the end of current year + number of mattresses in the ending inventory in the beginning of previous year

                                                     = 900 mattresses + 7,000 mattresses – 800 mattresses

                                                     = 7,100 mattresses

Therefore the company needs to produce 7,100 mattresses during the current year and the correct option in the given question is (c ) 7,100 mattresses.

ekkarill92 answered 2 years ago
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