1. Hannon Retailing Company prices its products by adding 30% to its cost. Hannon anticipates sales of $715,000 in July, $728,000 in August, and $624,000 in September. Hannon's policy is to have on hand enough inventory at the end of the month to cover 25% of next month's sales. What will be the cost of the inventory that Hannon should purchase in August?

a. $540,000 b. $560,000 c. $509,600 d. $680,000

2. Streeter Company produces plastic microwave turntables. Sales for the next year are expected to be 65,000 units in the first quarter, 72,000 units in the second quarter, 84,000 units in the third quarter, and 66,000 units in the fourth quarter. Streeter maintains a finished goods inventory at the end of each quarter to equal to one half of the units expected to be sold in the next quarter. How many units should Streeter produce in the second quarter?

a. 84,000 units b. 72,000 units c. 78,000 units d. 75,000 units