Reference no: EM131785600

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.