(Production, purchases, cash disbursements) Boston Tea Company has budgeted sales of 200,000 cans of iced tea mix during June 1997 and 375,000 cans during July. Production of the mix requires 14 ounces of tea and 2 ounces of sugar. Beginning inventories of tea and sugar are as follows:

Boston Tea Company generally carries an inventory of 3 percent of the following month’s needs for finished goods. Raw materials are stocked in relation to finished goods ending inventory. Assuming the desired ending inventory stock is achieved, answer the following questions.

a. How many cans of iced tea mix need to be produced in June?

b. Plow many ounces of tea need to be purchased in June? (There are 16 ounces in a pound.)

c. How many pounds of sugar need to be purchased in June?

d. If tea and sugar cost $4.50 and $.30 per pound respectively, what dollar amount of purchases is budgeted for June?

e. If Boston Tea Company normally pays for 30 percent of its budgeted pur¬ chases during the month of purchase and takes a 2 percent discount, what are budgeted cash disbursements for June purchases during June?LO1

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Iced tea mix Tea Sugar 4,300 cans of finished product 2,750 pounds 600 pounds