8. Baylor Products expects the following sales of its single product:

Units:

August 25,000

September 24,000

october 22,000

november 20,000

december 17.50

Baylor desires an ending finished goods inventory to be equal to 30% of the next month's sales needs. Each finished unit requires 2 pounds of component X which costs $3 per pound. Baylor desires to maintain a component X inventory equal to 10% of next month's production needs.

A.) Prepare a production budget for Baylor for as many months as is possible. B.) Prepare a direct raw material purchases budget for Component X for the months of August - October.

9. Refer to the production budget in Problem 8. Each finished unit requires 11 pounds of component Z which costs $8.00 per pound. Baylor desires to maintain a component Z inventory equal to 70% of next month's production needs.

Required: Prepare a direct raw material purchases budget for Component Z for the months of August - October.