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Drainage solutions Culverts Produces small culverts for water drainage under two-lane dirt roads. Budgeted unit sales for the next several months are: September - 2300

Drainage solutions Culverts Produces small culverts for water drainage under two-lane dirt roads. Budgeted unit sales for the next several months are:

September - 2300

October - 1800

November - 1100

December - 800

At the beginning of September, 575 units of finished goods were in inventory. During the final third of the year, as road construction declines, plans are to have an inventory of finished goods equal to 25% of the following month's sales. Each unit of finished goods requires 600 lbs of raw materials at a cost of $5 per pound. Management wishes to maintain month-end inventories of raw materials equal to 50% of the following month's needs. 500,000 lbs of raw materials were on hand at the start of September.

a. Prepare a production budget for September, October, and November.

b. Prepare a purchases budget in units and dollars for September and October.

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