Brislin Gifts Makes Ceramic Mugs and Has the Following Amounts

question 37

Multiple Choice

Brislin Gifts makes ceramic mugs and has the following amounts during 2017 (Assume the same unit costs in all years) : \begin{array}{lr}\text { Selling price } & \$ 9.00 \text { per mug } \\\text { Variable production cost } & \$ 2.50 \text { per mug } \\\text { Variable selling cost } & \$ 1.10 \text { per mug } \\\text { Fixed production cost } & \$ 100,000 \text { per month }\\\text { Fixed selling and administrative cost }& \$ 60,000 \text { per month }\\end{array}
$\text { Production and sales in units for the first three months of } 2017 \text { are as follows: }$

$\begin{array}{lll}\text { Year}&\text { Production}&\text { Sales }\\\text { January } & 50,000 & 44,000 \\\text { February } & 40,000 & 45,000 \\\text { March } & 44,000 & 46,000\end{array}$ Inventory at January 1, 2017 consisted of 1,000 mugs.How many units will remain in inventory at the end of February?

• A)2,000
• B)0
• C)7,000
• D)6,000

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