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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 compony's products. The company is planning its raw materials needs for the third quarter, the quarter in which peok 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 3,000 units of Supermix plus 25% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 19,250 units. b. The raw materials inventory on hand at the end of each month must equal one-half of the following monti's production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 99,375cc 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 o direct materials budget showing the quantiy of soivent H300 to be purchased for July, August, and September, and for the quarter in total. Prepare a production budget for Supermbx for the months July, August, September, and October. Complete this question by entering your answers in the tabs below. Prepare a direct materials budget showing the quantity of soivent H300 to be purchased for July, August, and September, and for the quarter total

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Step 1 Production Budget for July August September and October Given Finished goods inventory at the end of each month 3000 units 25 of next months sales Finished goods inventory on June 30 19250 unit... blur-text-image

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