10.

Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the companys products. The company is now planning 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:

a.	The finished goods inventory on hand at the end of each month must be equal to 3,000 units of Supermix plus 20% of the next months sales. The finished goods inventory on June 30 is budgeted to be 12,400 units.
b.	The raw materials inventory on hand at the end of each month must be equal to one-half of the following months production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 66,000 cc of solvent H300.
c.	The company maintains no work in process inventories.

A sales budget for Supermix for the last six months of the year follows July August September October November December Budgeted Sales in Units 47,000 52,000 62,000 42,000 32,000 22,000 Required: 1. Prepare a production budget for Supermix for the months July, August, September, and October Pearl Products Limited Production Budget LI AugustSeptember October Budgeted unit sales Total needs Required production in units