The finished goods inventory on hand at the end of each month must equal 3,000 units of
Question:
The finished goods inventory on hand at the end of each month must equal 3,000 units of Supermix plus 20% of the next month’s sales. The finished goods inventory on June 30 is budgeted to be 17,200 units.
The raw materials inventory on hand at the end of each month must equal one-half of the following month’s production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 108,000 ccs of solvent H300.
The company maintains no work-in-process inventories.
A monthly sales budget for Supermix for the third and fourth quarters of the year follows.
| Budgeted Unit Sales | |
| July | 71,000 |
| August | 76,000 |
| September | 86,000 |
| October | 66,000 |
| November | 56,000 |
| December | 46,000 |
Required:
1. Prepare a production budget for Supermix for the months July, August, September, and October.
3. Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July, August, and September, and for the quarter in total.
Expert Answer:
