Exercise $9-25$ Budgeting Production and Raw$-$Material Purchases $($

Greener Grass Fertilizer Company plans to sell $200\mathrm{.}000$ units of finished product in July and anticipates a growth rate in sales of $5$ percent

per month. The desired monthly ending inventory in units of finished product is $80$ percent of the next month's estimated sales. There are

$160\mathrm{.}000$ finished units in inventory on June $30.$ Each unit of finished product requires four pounds of raw material at a cost of $$1\mathrm{.}15$ per

pound. There are $700\mathrm{.}000$ pounds of raw material in inventory on June $30.$

Required:

Compute the company's total required production in units of flinished product for the entire three$-$month period ending September $30.$

Independent of your answer to requirement $1,$ assume the company plans to produce $600\mathrm{.}000$ units of finished product in the three$-$

month period ending September $30,$ 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. Compute the total estimated cost of raw$-$material purchases for the entire three$-$month period ending

September $30.$

$($CMA$,$ adapted$)$