2.875 per month However, Antonio decides to go with level prodi merchandise. He will produce the 11.500 items over four months at a What is the ending inventory at the end of each month? Compare the units sales to the units produced and keep a running total. b. If the inventory costs $8 per unit and will be financed at the bank at a cost of 12 percent, what is the monthly financing cost and the total for the four months? (Use I percent or the monthly rate.) Bambino Sporting Goods makes baseball gloves that are very popular in the spring and early summer season. Units sold are anticipated as follows: Level vers productie (L06-1) more information 6. ).000 if the 00 if the econ conomy will be Cent probabil March April May June 3,250 7,250 11,500 9,500 31,500 units year? the economy conomy is nomy will be ent probabil ext year? ventory and level. The dividend have to will occur and If seasonal production is used, it is assumed that inventory will directly match sales for each month and there will be no inventory buildup. The production manager thinks the preceding assumption is too optimistic and decides to go with level production to avoid being out of merchandise. He will produce the 31,500 units over four months at a level of 7,875 per month. a. What is the ending inventory at the end of each month? Compare the unit sales to the units produced and keep a running total. b. If the inventory costs $12 per unit and will be financed at the bank at a cost of 12 percent, what is the monthly financing cost and the total for the four months? (Use 0.01 as the monthly rate.) 7. Boatler Used Cadillac Co. requires $850,000 in financing over the next two years. The firm can borrow the funds for two years at 12 percent interest per year. Mr. Boatler decides to do forecasting and predicts that if he utilizes short- term financing instead, he will pay 7.75 percent interest in the first year and 13.55 percent interest in the second year. Determine the total two-year interest cost under each plan. Which plan is less costly? 8. Biochemical Corp. requires $550,000 in financing over the next three years. The firm can borrow the funds for three years at 10.60 percent interest per year. The CEO decides to do a forecast and predicts that if she utilizes short-term financ- ing instead, she will pay 8.75 percent interest in the first year, 13.25 percent interest in the second year, and 10.15 percent interest in the third year. Deter- mine the total interest cost under each plan. Which plan is less costly? Sho lon bon (LI Slevel. The ividend SL the lo b Intermediate Problems 9. Sauer Food Company has decided to buy a new computer system with an expected life of three years. The cost is $150,000. The company can borrow $150,000 for three years at 10 percent annual interest or for one year at 8 percent annual interest. of 12 percent, what is the monthly months? (Use I percent or the monthly rate.) Bambino Sporting Goods makes baseball gloves that are very popular in the spring and early summer season. Units sold are anticipated as follows: pre (L March April May June 3,250 7,250 11,500 9,500 31,500 units If seasonal production is used, it is assumed that inventory will directly match sales for each month and there will be no inventory buildup. The production manager thinks the preceding assumption is too optimistic and decides to go with level production to avoid being out of merchandise. He will produce the 31,500 units over four months at a level of 7,875 per month. a. What is the ending inventory at the end of each month? Compare the unit sales to the units produced and keep a running total. b. If the inventory costs $12 per unit and will be financed at the bank at a cost of 12 percent, what is the monthly financing cost and the total for the four months? (Use 0.01 as the monthly rate.)