WEEK 1-3 ULOd. Describe the budgeting framework and develop a master budget. Let's Analyze Activity 1. Now, it's your turn to apply your skill in preparing the components of the master budget. Problem 1 Lydia Company manufactures a single product. It keeps its inventory of finished goods at twice the coming month's budgeted sales and inventory of raw materials at 150% of the coming month's budgeted production. Each unit of product requires five pounds of materials, which cost P3 per pound. The sales budget is, in units: May, 10,000; June, 12,400; July, 12,600; August, 13,200. Required: 1. Compute the budgeted production for June. 12,800 2. Compute the budgeted production for July. 13,800 3. Compute budgeted material purchases for June in pounds and pesos. 71,500 lb and P214.500