How is the price determined for unsold kayaks at year-end?

This article is intended for students.

This article is for the Entrepreneurship simulation.

At the end of each year, most companies will have some unsold kayaks in their warehouses. To find out exactly how many are left in the inventory, check the performance Indicators for the Director of Production.

You do not have to set a separate price for these kayaks. They will be sold at the same price as the new kayaks you will make in the following year.

When they are sold, the cost of these kayaks will be transferred to the “Finished products stock - Beginning of year” in the Income Statement (see “Cost of goods sold”).

If you make changes to the kayak model (e.g., change suppliers or features), the simulation will assume that the unsold kayaks will be modified in the same way. This simplification is intended to make it easier to interpret the results.