Ensinada Mfg. Co., from Exercise 18, produces candles that contain four raw materials: wax, dye, scented oil, and a wick. Each candle uses eight ounces of wax and one ounce of dye, which Ensinada purchases for $0.15 and $0.02 per ounce, respectively. Ensinada ends each month with enough wax to manufacture 10 percent of the following month’s production needs; desired ending inventory for dye is 15 percent of the following month’s production needs. Production for July is calculated at 41,775 units.
Required:
Prepare Ensinada’s purchases budgets for wax and dye for each month of the second quarter and the total for the second quarter of 2010.