Annie’s Homemade Ice Cream buys branded t-shirts from a supplier for $12.00 each and sells them to customers for $20.00 apiece. Next year, it expects to sell an average of 50 t-shirts per month and hopes the following year’s unit sales will grow by 20%. This year’s ending inventory includes 120 t-shirts and the company expects next year’s ending inventories to equal 25% of the following year’s sales.
