Question
ABC Corp. manufactures a cleaning product called Gemini. Expected sales for Gemini (in litres) for the November to January quarter are as follows: November December
ABC Corp. manufactures a cleaning product called Gemini. Expected sales for Gemini (in litres) for the November to January quarter are as follows: November December January Budgeted sales of Gemini (litres) 62,500 67,500 55,000 November beginning inventory of Gemini is 3,125 litres, and the company keeps an ending inventory equal to 5% of next month's sales. The following information relates to Gemini's two main ingredients, Alpha and Beta: Units required to make 1 litre of Gemini Cost per unit Opening inventory Alpha 4 $4.00 1,020 Beta 12 $8.20 3,080 To maintain smooth operations, the company uses just-in-time inventory management and at the end of November plans to have just 0.2% of next month's production requirements on hand in ending inventory.
How much should ABC's controller budget for the cost of raw materials purchases of Alpha and Beta for November?
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