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Dante Ltd prepares annual budgets. The following beginning and ending inventory levels (in units) are planned for next year. Four kilograms of direct material are

Dante Ltd prepares annual budgets. The following beginning and ending inventory levels (in units) are planned for next year. Four kilograms of direct material are required to produce each unit of finished product.

I January 31 December

Direct Material 80,000 100,000

Work in Progress 20,000 20,000

Finished Goods 160,000 100,000

Required:

1) If Dante plans to sell 480,000 units during the year, calculate the number of units the firm would have to manufacture.

2) If 600,000 finished units are to be manufactured by Dante during the year, determine the amount of direct material that needs to be purchased.

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