Question

Mackenzie Chemicals has developed a new window cleaner that requires two ingredients, AM972 and CA38. Based on forecasted sales, Mackenzie has developed the following budgeted production for the coming year.



Each gallon of window cleaner requires 100 ounces of AM972 and 28 ounces of CA38.
An ounce of AM972 costs Mackenzie $0.15. An ounce of CA38 costs the company $0.25. Mackenzie’s inventory policy requires ending inventory equal to 20 percent of the next quarter’s production needs. At the beginning of the year, Mackenzie expects to have 80,000 ounces of AM972 and 30,000 ounces of CA38 on hand.

Required
Prepare Mackenzie’s AM972 purchases budget for the comingyear.


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  • CreatedFebruary 21, 2014
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