Each gallon of Old Guard, a popular aftershave lotion, requires 6 ounces of ocean scent. Budgeted production

Question:

Each gallon of Old Guard, a popular aftershave lotion, requires 6 ounces of ocean scent. Budgeted production of Old Guard for the first three quarters of 2010 is:
Quarter I .....10,000 gallons
Quarter II ...18,000 gallons
Quarter III .....11,000 gallons
Management’s policy is to have on hand at the end of every quarter enough ocean scent inventory to meet 30% of the next quarter’s production needs. At the beginning of Quarter I, 18,000 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 2010.
b. Explain why management plans for an instead of planning to purchase each quarter the amount of raw materials needed for that quarter’s production.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...