Alvarez Company produces various parts used in the automotive industry. The sales budget for the first eight months of 2012 shows the following projections:

Month	Units	Month	Units
January	25,000	May	31,400
February	27,000	June	34,500
March	32,000	July	36,700
April	28,500	August	35,000

Inventory on December 31 of the previous year was budgeted at 6,250 units. The desired quantity of finished-goods inventory at the end of each month in 2012 is to be equal to 25 percent of the next months budgeted unit sales. Each unit of finished product requires three pounds of raw material. The company wants to have 30 percent of next months required raw materials on hand at the end of each month.

Required

A.Prepare a production budget for January through June of 2012.

B.Prepare a material purchases budget for the same period, assuming that each pound of raw material costs $22.