Required information

[The following information applies to the questions displayed below.] Each gallon of Old Guard, a popular aftershave lotion, requires 2.25 ounces of ocean scent. Budgeted production of Old Guard for the first three quarters of 2019 is as follows:

Quarter I	15,000	gallons
Quarter II	18,000	gallons
Quarter III	12,000	gallons

Managements policy is to have on hand at the end of every quarter enough ocean scent inventory to meet 24% of the next quarters production needs. At the beginning of Quarter I, 8,100 ounces of ocean scent were on hand.

Required: a. Calculate the number of ounces of ocean scent to be purchased in each of the first two quarters of 2019.

	Quarter I	Quarter II
Number of Ounces

b. Indicate why management plans for an ending inventory instead of planning to purchase each quarter the amount of raw materials needed for that quarters production. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

• Inventory provides a cushion for delivery delays.unanswered
• Inventory provides a cushion for production needs in excess of production forecast.unanswered
• Inventory provides a cushion for payment delays.unanswered
• Inventory provides a cushion for sales needs in excess of sales forecast.