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9 September, 07:33

Samuelson will produce 20,000 units in January using level production. If each unit costs $500 to manufacture, what is the dollar value of ending inventory in January if beginning inventory is 10,000 units and January sales are 15,000?

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  1. 9 September, 11:05
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    The dollar value of ending inventory is $7.500.000

    Explanation:

    To calculate the dollar value of ending inventory you need to use the next formula:

    End inventory = (Beginning inventory + production - sales).$

    In this case:

    - Beginning inventory: 10.000 units

    - January Production: 20.000 units

    - Sales: 15.000 units

    End inventory = 10000+20000-15000

    End inventory = 15.000 units

    Dollar value = 150000. $500 = $7.500.000
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