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EX 9 - 2 5 ( Algo ) Budgeting Production and Raw - Material Purchases ( LO 9 - 3 , 9 - 6 )
EX Algo Budgeting Production and RawMaterial Purchases LO
GreenThumb Organic Fertilizer Company plans to sell units of finished product in July and anticipates a growth rate in sales
of percent per month. The desired monthly ending inventory in units of finished product is percent of the next month's estimated
sales. There are finished units in inventory on June Each unit of finished product requires pounds of raw material at a
cost of $ per pound. There are pounds of raw material in inventory on June
Required:
Compute the company's total required production in units of finished product for the entire threemonth period ending September
Note: Round all intermediate calculations and your final answer to the nearest unit.
Independent of your answer to requirement assume the company plans to produce units of finished product in the three
month period ending September and to have rawmaterial inventory on hand at the end of the threemonth period equal to
percent of the use in that period. Compute the total estimated cost of rawmaterial purchases for the entire threemonth period
ending September
Total required production in units
Total estimated cost
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