For the following production estimates, what is the amount to be spent on buying raw material in July.Estimated inventory (units), July 1:...

According to the production estimates for July, the
company's inventory as on July 1 is 8500 units. It  requires this to increase and the
inventory to be 10500 units on July 31. This means that an excess 2000 units need to be
manufactured in addition to the units that are sold. The sale for the month of July is
76000. So a total of 76000 + 2000 = 78000 units need to be
produced.

Each unit requires 3 units of material A and half
a pound of material B. Material A costs $5 per unit, so 3 units cost $15. As half a
pound of material B is required $9 has to be spent here. There is no raw material in
store and all of it has to be bought in July.

So the amount
to be spent to buy material A is 78000*15 = $1170000. The amount to be spent to buy
material B is 78000*9 = $702000

The correct
amount to be spent for A is $1170000 and the amount to be spent for material B is
$702000.