B. James Company is preparing a production budget for the third quarter. Ending inventory level must equal 15% of the next months sales.

1. Prepare a production budget for the third quarter, in total, October and November by month.

	2019
	July	August	September	Q3 Total	October	November
Next Month Budget Sale	25,000	28,000	36,000	89000	42,000	50,000
Ratio of Inventory
Desired Units in Ending inventory
Plus: Budgeted sales in units
Total Units Needed
Less: Units in Beginning Inventory
Budgeted units to be Produced

C. James Company uses 3 pounds of direct materials for each unit it produces, at a cost of $6 per pound. Management desires an ending inventory of 15% of next month's materials needed for production. The company ends with 24320 pounds of material in Raw Materials Inventory in October.

1. Prepare a Direct Materials Budget for the third quarter, in total and October by month.

	2019
	July	August	September	Q3 Total	October
Budgeted units to be Produced	25,000	28,000	36,000	89000	42,000
Materials required per unit	3	3	3	3	3
Material units needed for production	75000	84000	108000	267000	126000
Plus: desired/budgeted ending inventory
Total material units required
Less: beginning inventory
Material units to be purchased
Material cost per unit	$6	$6	$6	$6	$6
Total cost of direct materials