A sales budget is given below for one of the products manufactured by Trumpet, Ltd.
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.
Correct Answer:
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