Question
A sales budget is given below for one of the products manufactured by Trumpet, Ltd. Month Sales Budget in Units July 28,000 August 30,000 September
A sales budget is given below for one of the products manufactured by Trumpet, Ltd.
Month | Sales Budget in Units |
July | 28,000 |
August | 30,000 |
September | 34,000 |
October | 36,000 |
November | 29,000 |
December | 26,000 |
The inventory of finished goods at the end of each month must be equal to 20% of the next month's sales. On June 30, the finished goods inventory totaled 6,800 units. Each unit of product requires ten ounces of a special chemical known as AQ-12. Sometimes the chemical is in short supply; for this reason, the company has a policy of maintaining an inventory at the end of each month equal to 75% of the next month's production needs. This requirement was met on July 1 of the current year. Required: Prepare a budget showing the quantity of AQ-12 to be purchased for October.
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