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 finished goods inventory?

Question

Quizplus · Accepted Answer

With an expected increase in sales, the company would likely need to increase its desired ending finished goods inventory in order to meet the higher demand.

A Company Has Had Stable Sales and Production for Several