Greener grass fertilizer company plans to sell 260000 units

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Reference no: EM13370550

Greener Grass Fertilizer Company plans to sell 260,000 units of finished product in July and anticipates a growth rate in sales of 5 % per month. The desired monthly ending inventory in units of finished product is 80 % of the next month's estimated sales. There are 208,000 finished units in inventory on June 30. Each unit of finished product needs 3 pounds of raw material at a cost of $2.05 per pound. There are 880,000 pounds of raw material in inventory on June 30.

Required:
1. Evaluate the company's total required production in units of finished product for the whole three month period ending September 30. (Do not round intermediate calculations. Round your final answer to the nearest unit.)

2. Independent of your answer to part (1), suppose the company plans to produce 700,000 units of finished product in the three-month period ending 30^th September, 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. Evaluate the total estimated cost of raw-material purchases for the entire three-month period ending 30^th September. (Omit the "$" sign in your response.)

Reference no: EM13370550

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