(Production; purchases; cash disbursements) Brenda’s Tea Company has bud¬ geted sales of 300,000 cans of iced tea mix during June 2006 and 375,000 cans during July. Production of the mix requires 14 ounces of tea and 2 ounces of sugar. June 1 inventories of tea and sugar are as follows:

The company generally carries an inventory of 5 percent of the following month’s needs for finished goods. Raw materials are stocked in relation to finished goods ending inventory. Assuming that 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. How many pounds of tea need to be purchased in June?
C. How many pounds of sugar need to be purchased in June?

d. If tea and sugar cost $3.50 and $0.40 per pound, respectively, what dol¬ lar amount of purchases is budgeted for June?

e. If the company normally pays for 30 percent of its budgeted purchases during the month of purchase and takes a 2 percent discount, what are budgeted cash disbursements for June purchases during June?LO.1 

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Iced tea mix Tea Sugar 12,300 cans of finished product 750 pounds 200 pounds