Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout Southeast Asia. Three cubic centimeters cc of solvent H are required to manufacture each unit of Supermix, one of the companys products. The company is planning its raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements:

The finished goods inventory on hand at the end of each month must equal units of Supermix plus of the next months sales. The finished goods inventory on June is budgeted to be units.

The raw materials inventory on hand at the end of each month must equal onehalf of the following months production needs for raw materials. The raw materials inventory on June is budgeted to be cc of solvent H

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

August

September

October

November

December

Required:

Prepare a production budget for Supermix for the months July, August, September, and October.

Prepare a direct materials budget showing the quantity of solvent H to be purchased for July, August, and September, and for the quarter in total.

Answer rating: 100% (QA)

1 Production Budget for Supermix Month Budgeted Sales Units for Finished Goods ... View the full answer