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Exercise 8-10 (Algo) Production and Direct Materials Budgets (LO8-3, LO8-4) Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three

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Exercise 8-10 (Algo) Production and Direct Materials Budgets (LO8-3, LO8-4) Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company's products. The company is planning its raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following Inventory requirements: a. The finished goods inventory on hand at the end of each month must equal 2,000 units of Supermix plus 25% of the next month's sales. The finished goods Inventory on June 30 is budgeted to be 20,250 units. b. The raw materials inventory on hand at the end of each month must equal one-half of the following month's production needs for raw materials. The raw materials Inventory on June 30 is budgeted to be 111,375 cc of solvent H300. c. The company maintains no work in process inventories. A monthly sales budget for Supermix for the third and fourth quarters of the year follows. July Nugrunt September October November December Budgeted Unit tale 73,000 70,000 88.000 68.000 58,000 48.000 Required: 1. Prepare a production budget for Supermix for the months July, August, September, and October 3. Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July August, and September, and for the quarter in total Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Required: Required a Prepare a production budget for Supermix for the months July, August September, and October Pearl Products Limited Production Budget July Budgeted unit sales 73,000 Add: Desired units of ending raw materials inventory Total needs September August 78,000 October 68,000 88,000 Les Units of beginning w materials inventory Hequired production in units Required 3 Complete this question by entering your answers in the tabs below. Required 1 Required 3 Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July, August, and September, and for the quarter in total Poart Products Limited Direct Materials Budget July August September Third quarter Unit of raw materials needed per unit of finished goods Units of raw material needed to meet production ce ca 00 Total units of raw materials needed Units of raw materials to be purchased

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