Homework Help is Here – Start Your Trial Now!
Business
Accounting
GreenThumb Organic Fertilizer Company plans to sell 260,000 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 85 percent of the next month's estimated sales. There are 221,000 finished units in inventory on June 30. Each unit of finished product requires 4 pounds of raw material at a cost of $1.45 per pound. There are 730,000 pounds of raw material in inventory on June 30. Required: 1. Compute the company's total required production in units of finished product for the entire three-month period ending September 30. Note: Round all intermediate calculations and your final answer to the nearest unit. 2. Independent of your answer to requirement 1, assume the company plans to produce 620,000 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.

GreenThumb Organic Fertilizer Company plans to sell 260,000 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 85 percent of the next month's estimated sales. There are 221,000 finished units in inventory on June 30. Each unit of finished product requires 4 pounds of raw material at a cost of $1.45 per pound. There are 730,000 pounds of raw material in inventory on June 30. Required: 1. Compute the company's total required production in units of finished product for the entire three-month period ending September 30. Note: Round all intermediate calculations and your final answer to the nearest unit. 2. Independent of your answer to requirement 1, assume the company plans to produce 620,000 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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
None
GreenThumb Organic Fertilizer Company plans to sell 260,000 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 85 percent of the next month's estimated sales. There are 221,000 finished units in inventory on June 30. Each unit of finished product requires 4 pounds of raw material at a cost of $1.45 per pound. There are 730,000 pounds of raw material in inventory on June 30. Required: 1. Compute the company's total required production in units of finished product for the entire three-month period ending September 30. Note: Round all intermediate calculations and your final answer to the nearest unit. 2. Independent of your answer to requirement 1, assume the company plans to produce 620,000 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. Answer is complete but not entirely correct. 1. Total required production in units 2. Total estimated cost 842,302 $ 3,436,500
Transcribed Image Text:GreenThumb Organic Fertilizer Company plans to sell 260,000 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 85 percent of the next month's estimated sales. There are 221,000 finished units in inventory on June 30. Each unit of finished product requires 4 pounds of raw material at a cost of $1.45 per pound. There are 730,000 pounds of raw material in inventory on June 30. Required: 1. Compute the company's total required production in units of finished product for the entire three-month period ending September 30. Note: Round all intermediate calculations and your final answer to the nearest unit. 2. Independent of your answer to requirement 1, assume the company plans to produce 620,000 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. Answer is complete but not entirely correct. 1. Total required production in units 2. Total estimated cost 842,302 $ 3,436,500
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Strengths and Weaknesses
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS