Question #2 20 marks Chemical Solutions Ltd. Victoria, BC, manufactures and distributes toys throughout central Canada. Three cubic centimetres (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company's products. The company expects to pay $0.25 per cc of H300 to its suppliers. The company is now planning its raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 5,000 units Supermix plus 20% of next month's sales. The finished goods inventory on June 30 is budgeted to be 12,000 units. b. The raw materials inventory on hand at the end of each month must be equal to 40% of the following month's raw materials requirements. The raw materials inventory on June 30 is budgeted to be 440,000 cc of solvent H300. c. The company maintains no goods in process inventories. Estimated sales for July to December are as follows: Budgeted Sales (units) Month 350,000 July 400,000 August 500,000 September 300,000 October November 200,000 December 100,000