Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Greener Grass Fertilizer Company plans to sell 220,000 units of finished product in July and anticipates a growth rate in sales of 5 percent per

Greener Grass Fertilizer Company plans to sell 220,000 units of finished product in July and anticipates a growth rate in sales of 5 percent per month. The desired monthly ending inventory in units of finished product is 85 percent of the next months estimated sales. There are 187,000 finished units in inventory on June 30. Each unit of finished product requires 4 pounds of raw material at a cost of $1.65 per pound. There are 750,000 pounds of raw material in inventory on June 30.

Required:

  1. Compute the companys total required production in units of finished product for the entire three-month period ending September 30. (Round all intermediate calculations and your final answer to the nearest unit.)

  2. Independent of your answer to requirement (1), assume the company plans to produce 780,000 units of finished product in the three-month period ending September 30, and to have raw-material inventory on hand at the end of the three-month period equal to 25 percent of the use in that period. Compute the total estimated cost of raw-material purchases for the entire three-month period ending September 30.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Marketing Audit Of A Private Health Care Facility Case Of The Bondeko Clinic

Authors: Tyty ELOOT ONDAIN

1st Edition

6204271237, 978-6204271231

More Books

Students also viewed these Accounting questions