Question
San Fernando Fertilizer Company plans to sell 260,000 units of finished product in July and anticipates a growth rate in sales of 4 percent per
San Fernando Fertilizer Company plans to sell 260,000 units of finished product in July and anticipates a growth rate in sales of 4 percent per month. The desired monthly ending inventory in units of finished product is 85 percent of the next month's estimated sales. There are 221,000 finished units in inventory on June 30. Each unit of finished product requires 3 pounds of raw material at a cost of $1.95 per pound. There are 840,000 pounds of raw material in inventory on June 30.
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