A company has had stable sales and production for several years. Next year, sales are expected to increase by at least 50%. Assuming 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?
A) it will increase
B) it will decrease
C) it will stay the same
D) none of these
E) it will be twice the size of the desired ending inventory of raw materials
A
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