Robusto Coffee Traders Inc

question 29

Multiple Choice

Robusto Coffee Traders Inc. sells prepackaged coffees to a variety of businesses throughout the East Coast. Robusto purchases the coffee in bulk from a wholesale distributor and packages the coffee themselves to sell to customers. The company expects to sell 120,000 and 135,000 one-pound packages of coffee during 2012 and 2013, respectively. The company had 6,000 one-pound packages on hand at the beginning of 2012, and the company has a policy of maintaining an ending inventory equal to 5 percent of the packages needed for next year's expected sales. How many packages of coffee should the company plan to purchase in 2012?

• A) 126,750
• B) 120,750
• C) 119,250
• D) 255,000

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