Question

Nantucket Industries manufactures and sells two models of​ watches, Prime and Luxuria. It expects to sell 3 comma 000 units of Prime and 2 comma 000 units of Luxuria in 2019.The following estimates are given for​ 2019: Prime Luxuria Selling price ​$200 ​$500 Direct materials 60 70 Direct labor 90 190 Manufacturing overhead 60 110 Nantucket had an inventory of 250 units of Prime and 85 units of Luxuria at the end of 2018. It has decided that as a measure to counter stock outages it will maintain ending inventory of 350 units of Prime and 210 units of Luxuria. Each Luxuria watch requires one unit of Crimpson and has to be imported at a cost of $ 12.00. There were 140 units of Crimpson in stock at the end of 2018.The management does not want to have any stock of Crimpson at the end of 2019.

How many units of Prime watches must be produced in​ 2019?

A. 2 comma 750 units
B. 3 comma 350 units
C. 3 comma 100 units
D. 3 comma 000 units

Answer 1

Answer:

Option (C) is correct.

Explanation:

Given that,

Expected unit sales = 3,000 units

Ending units = 350 units

Beginning units = 250 units

Units of Prime watches must be produced in​ 2019:

= Expected unit sales + Ending units - Beginning units

= 3,000 units + 350 units - 250 units

= 3,100 units

3,100 units of Prime watches must be produced in​ 2019.