Exercise 8-10 (Algo) Production and Direct Materials Budgets [LO8-3, LO8-4] Pearf 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 foliowing inventory requirements: a. The finished goods inventory on hand at the end of each month must equal 3.000 units of Supermix plus 20% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 12,400 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 72,000cc of solvent H30O. 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. 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 H30O to be purchased for July, August. and September, and for the quarter in total. Required: 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 H30O 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. Prepare a production budget for Supermix for the months July, Auqust, September, and October. 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 H30O 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. Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July, August, and September, and for t total