Question: 4. Farhan, the CFO for Dubai Ltd., is preparing a forecast of inventory for the bank. Farhan has to prepare a three-month projection for
4. Farhan, the CFO for Dubai Ltd., is preparing a forecast of inventory for the bank. Farhan has to prepare a three-month projection for July, August, and September, and has gathered the following information: Projected unit sales: June 112,000; July 150,000; August - 137,000; September - 136,000 Production in units: July 148,700; August-136,900; September - 136,400 Direct material cost per unit is $105.00. Direct materials are immediately used in production when received. Direct labour cost per unit is $56.00. Indirect costs are 26% of direct labour. Opening inventory on July 1 consisted of 15,000 units. The bank has agreed to loan the company up to 80% of the inventory balance outstanding. At the end of September, what is the maximum amount available to borrow from the bank under this agreement? . .
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