Carlos Cavalas, the manager of Echo Products' Brazilian Division, is setting the production schedule for the...

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Carlos Cavalas, the manager of Echo Products' Brazilian Division, is setting the production schedule for the last quarter of the year. The Brazilian Division planned to sell 68,090 units during the year, but by September 30 only the following activity had been reported: Inventory, January 1 Production Sales Inventory, September 30 Units 0 71,600 61,900 9,700 The division can rent warehouse space to store up to 29,400 units. The minimum inventory level the division should carry is 1,500 units. The minimum production must be at least 5,820 units per quarter to retain a nucleus of key employees. Maximum production capacity is 45,400 units per quarter. The sales forecast for the last quarter is only 19,400 units and fixed manufacturing overhead is a major element of product cost. Required: 1a. Assume the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? 1b. Assume the division is using variable costing. Will the number of units scheduled for production affect the division's reported income or loss for the year? 2. Assume the division is using absorption costing and the divisional manager is given an annual bonus based on divisional operating income. If Mr. Cavalas wants to maximize his division's operating income for the year, how many units should be scheduled for production during the last quarter? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Assume the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? Required production units < Required 1A Required 1B > Carlos Cavalas, the manager of Echo Products' Brazilian Division, is setting the production schedule for the last quarter of the year. The Brazilian Division planned to sell 68,090 units during the year, but by September 30 only the following activity had been reported: Inventory, January 1 Production Sales Inventory, September 30 Units 0 71,600 61,900 9,700 The division can rent warehouse space to store up to 29,400 units. The minimum inventory level the division should carry is 1,500 units. The minimum production must be at least 5,820 units per quarter to retain a nucleus of key employees. Maximum production capacity is 45,400 units per quarter. The sales forecast for the last quarter is only 19,400 units and fixed manufacturing overhead is a major element of product cost. Required: 1a. Assume the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? 1b. Assume the division is using variable costing. Will the number of units scheduled for production affect the division's reported income or loss for the year? 2. Assume the division is using absorption costing and the divisional manager is given an annual bonus based on divisional operating income. If Mr. Cavalas wants to maximize his division's operating income for the year, how many units should be scheduled for production during the last quarter? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Assume the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? Required production units < Required 1A Required 1B >

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Required 1A To determine the number of units that should be scheduled for production during the last quarter of the year using variable costing we nee... View the full answer