1&2

Pearl Products manufactures and distributes toys throughout the country. Three cubic centimeters of Solvent H compound are required to manufacture each unit of Supermix, one of the company's products. The company is planning its raw materials needs for the third quarter. 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 equal 3,000 units of Supermix plus 20% of the next month's sales. The Finished Goods Inventory on June 30 is budgeted to be 10,000 units. b) The Raw Materials Inventory on hand at the end of each month must equal 1/2 of the following month's production needs for raw materials. The Raw Materials Inventory on June 30 is budgeted to be 54,000 cubic centimeters of Solvent H. c) The company does not maintain any WIP Inventory. d) A monthly sales budget for Supermix for the third and fourth quarters of the year is below: Required 1) Prepare a production budget for Supermix for the months of July, August, September, and October. 2) Prepare a direct materials budget for Solvent H showing the quantity of solvent to be purchased for the months of July, August, September, and October