Franklin Products Limited manufactures and distributes a number of products to retailers. One of these products, SuperStick, requires five kilograms of material D236 in the manufacture of each unit. The company is now planning raw materials needs for the third quarter--July, August, and September Peak sales of SuperStick occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 8.600 units plus 20% of the next month's sales The finished goods inventory on June 30 is budgeted to be 22720 units. b. The raw materials inventory on hand at the end of each month must be equal to 40% of the following month's production needs for raw materials. The raw materials inventory on June 30 for material D236 is budgeted to be 131.400 kilograms. c. The company maintains no work in process inventories A sales budget for SuperStick for the last six months of the year follows. Budgeted Sales In Units July 61,200 August 75,600 September 106,200 October 53,600 November 30,600 December 15,240 Required: 1. Prepare a production budget for SuperStick for July, August, September, and October October 53,600 Answer is complete and correct. July August September 61,200 75,600 106,200 23,720 29 840 19,320 84 920 105.440 125,520 22.720 23720 29.840 62 200 81.720 95.680 Budgeted sales (units) Add Desired ending inventory Total needs Less Beginning inventory Required production 14.720 68 320 19 320 49.000 > 3. Prepare a direct materials purchases budget showing the quantity of material D236 to be purchased for July, August, and September and for the quarter in total Answer is complete but not entirely correct. August 81720 4 September 95 680 Third Quarter 239,600 4 326 880 958 400 July Required production (units) 62 200 Material D236 needed per unit (kgs) Production needs (kgs.) 248 800 Add Desired ending inventory 130.752 (kgs Total Material D236 needs 379,552 Less beginning inventory (kg) 131 400 Material D236 purchases (kgs:) 248. 152 382,720 78 400 153,088 78.400 479.968 130,752 % 349 216 461 120 153.088 3 308,032 1.036 800 78 400 958 400