Maha industries produces a product whose anticipated demand for the six periods is 263, 256, 301, 312, 304, and 294. If the firm has adopted level production strategy with a constant production of 280 units per period. The regular production cost is RO 12 per unit, whereas the overtime and subcontract costs are RO 20 and RO 25 per unit respectively. There is no limit on subcontracting; however, maximum overtime production capacity is 10. Average inventory holding cost is RO 5 per unit per period. What will be inventory level at the end of period 3? a. 20 O b. 0 O c. 17 Od. 41 e. None is correct

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Maha industries produces a product whose anticipated demand for the six periods is 263, 256, 301, 312, 304,
and 294. If the firm has adopted level production strategy with a constant production of 280 units per period.
The regular production cost is RO 12 per unit, whereas the overtime and subcontract costs are RO 20 and RO
25 per unit respectively. There is no limit on subcontracting; however, maximum overtime production capacity
is 10. Average inventory holding cost is RO 5 per unit per period. What will be inventory level at the end of
period 3?
a.
20
Ob. 0
O c. 17
Od. 41
O e.
None is correct
Transcribed Image Text:Maha industries produces a product whose anticipated demand for the six periods is 263, 256, 301, 312, 304, and 294. If the firm has adopted level production strategy with a constant production of 280 units per period. The regular production cost is RO 12 per unit, whereas the overtime and subcontract costs are RO 20 and RO 25 per unit respectively. There is no limit on subcontracting; however, maximum overtime production capacity is 10. Average inventory holding cost is RO 5 per unit per period. What will be inventory level at the end of period 3? a. 20 Ob. 0 O c. 17 Od. 41 O e. None is correct
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