Robusto Coffee Traders Inc

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