Exercise 4-26 Millet Corporation manufactures and sells stuff toys. She is busy with the third and fourth quarters of 2021 at the moment. She asks your help to prepare some of these budgets: The sales budget in units is as follows: Third quarter Fourth quarter 45,000 pieces 70,000 pieces 140 It is decided that stuff toys inventories are to be 20,000 pieces at the end of the third quarter, and 5,000 pieces at the end of the fourth quarter. The inventory at the start of the third quarter will consist of 8,000 stuff toys. Each stuff toy is packaged in a colorful cardboard box, and contains 2 units of Material A and 5 units of Material B. The inventory of materials at the beginning of the third quarter will be: Boxes Material A Material B 125,000 pieces 15,000 units 45,000 units There are sufficient boxes on hand for both quarters; none will be purchased during the two periods. Material A can be bought whenever needed and in any quantity desired. The starting inventory of 15,000 units is considered to be an ideal quantity. Material B must be purchased in quantities of 10,000 units, or multiples of 10,000. It is desired that at the end of the third and fourth quarters, a minimum quantity of 30,000 units be on hand, or as close thereto as the standard quantity will permit. REQUIRED: 1. Prepare a production budget for the third and fourth quarters of 2021. 2. Prepare a purchases budget for Material A and Material B for the third and fourth quarters of 2021. 3. How many boxes will be on hand at the end of the fourth quarter? Millet Corporation Production Budget For the Third & Fourth Quarters of 2021 3 Quarter 4th Quarter Sales budget Add: Ending inventory Total requirements Less: Beginning inventory Production budget Millet Corporation Purchases Budget- Material A For the Third & Fourth Quarters of 2021 3rd Quarter 4th Quarter 2 2 Production budget x No. of units required Production requirements Add: Ending inventory Total requirements Less: Beginning inventory Purchases budget (units) Millet Corporation Purchases Budget- Material B For the Third & Fourth Quarters of 2021 3rd Quarter 4th Quarter 5 5 Production budget x No. of units required Production requirements Add: Ending inventory Total requirements Less: Beginning inventory Purchases budget (units) Boxes