1) Gertrude Products expects the following sales of its single product:

	Units
July	6,000
August	6,500
September	7,200
October	7,800
November	8,800

Gertrude desires an ending finished goods inventory to be equal to 10% of the next month's sales needs. July 1 inventory is projected to be 800 units. Each unit requires 5 pounds of Chemical A and 14 pounds of Chemical B. July 1 materials inventory includes 8,600 pounds of Chemical A and 76,000 pounds of Chemical B. Gertrude desires to maintain a Chemical A inventory equal to 20% of next month's production needs and a Chemical B inventory equal to 100% of next month's production needs.

a. Prepare a production budget for Gertrude for as many months as is possible.

b. Prepare a direct materials purchases budget for both Chemical A.

a. Production Sales July 6000 August 6500 September 7200 Qtr. Total 19700 +Ending Inv. 6500*0.1= 650 720 780 2150 -Beginning Inv. 800 650 720 1970 Production July b. Chemical A Production August September Qtr. Total x 5 Pounds Chemical A needs + Ending Inv. 9 - Beginning Inv. Purchases of A