105. Lubriderm Corporation has the following budgeted sales for the next sis-mon'i period: Month Unit Sales June 00,000 July 120,000 August 210,000 September 150,000 October 100,000 November 120,000 There were 30,000 units of finished goods in inventory at re beginning of June. Plans are to have an inventory of finished products that equal 20% of the unit sales for the nest month. Five pounds of materials are required for each unit produced. Each pound of material costs $0. Inventory levels for materials are equal to 30% of the needs for the next month. Materials inventory on June 1 was 15,000 pounds. Required: a. Prepare production budgets in units for July, August, and September. b. Prepare a purchases budget in pounds for July, August, and September, and give total purchases in both pounds and dollars for each month. Answer: a. July August September Budgeted sales 120,000 210,000 150,000 Add: Required ending inventory 02,000 30,000 30000 Total inventory requirements 102,000 240,000 100,000 Less: Beginning inventory 24 000 42 000 30 000 Budgeted Pmduf m m M b. July August September Production in units 130 000 100 000 150 000 Targeted ending inventory in lbs: 202, 000 234,000 -252,000 Production needs in lbs.- 0_,_00 000 000,000 200,000 Total requirements in lbs. 002,000 1,224,000 1,032,000 Less: Beginning inventory in lbs. 202,000 202,000 234,000 Purchases needed in lbs. 200,000 022,000 200,000 Cost [$0 per 1b.} 3 $0 1: 00 E 00 Total material purchases 00,240,000 02,410,000 00,304,000 0.3 limes nest month's needs - [100,000 + 24,000 30,000} times 5 lbs. it 0.3 5 lbs. times units to be produced (saunas s .s} = august: lbs