Phoenix Laboratories, Inc. processes one type of blood test. They charge $41 for this test. The average cost of the test kits they use is 16% of revenue. They are preparing a budget for 20X9. 

Their statistics budget shows the following expected volumes: 

September 629 tests 

October 698 tests 

In anticipation of fluctuations in volume and potential for wasted test kits, they always use a buffer factor of 121% in planning for inventory. As of August 31, 20X9, they had 874 test kits on hand. 

Assuming that one test kit is used for each test administered to a patient, what is the dollar amount of inventory they should plan to have on hand at September 30, 20X9?

Answer rating: 100% (QA)

To calculate the dollar amount of inventory Phoenix Laboratories should plan to have on hand at Sept... View the full answer