Q1) Hargrow, Inc. manufactures and sells single product, buckets. It takes 30 ounces of plastic to make one bucket. Budgeted production of buckets for next three months is given below: August 90,000 buckets, September 75,000 buckets, October 65,000 buckets. Company wishes to sustain monthly ending raw material inventories of plastic equal to 10% of following month's production requirements. On August 1st 270,000 ounces of plastic were on hand. Cost of plastic is $0.03 per ounce.
How much ending inventory of plastic must be reported on company's balance sheet at September 30?
i) $5,850
ii) $6,750
iii) $7,500
iv) $64,350
v) $195,000