A company has had stable sales and production for several years.Next year,sales are expected to increase by at least 50%.Assume that the company maintains its policy for desired ending inventories of finished product and direct materials purchases.What will be the likely effect on the desired ending inventory of finished product?

Question

Quizplus · Accepted Answer

With an expected increase in sales, the company will likely need to produce more finished products to meet the demand. This means that the desired ending inventory of finished product will increase to accommodate the expected increase in sales.

A Company Has Had Stable Sales and Production for Several