Stevenson Pools, a manufacturer of swimming chemicals, plans to sell 200,000 units

of finished product in July 2007. Management anticipates a growth rate in sales of 5

per cent per month. The desired monthly ending inventory in units of finished product

is 80 per cent of the next month's estimated sales. There are 150,000 finished units

in the inventory on 30 June. Each unit of finished product requires 4 kilograms of

direct material at a cost of $6 per kilogram. There are 800,000 kilograms of direct

material in the inventory on 30 June 2007.