Inter Corporation has the following budgeted sales for the next six

-

month period:

Month

Unit Sales

June

90,000

July

120,000

August

210,000

September

150,000

October

180,000

November

120,000

There were 30,000 units of finished goods in inventory a

t the beginning of June. Plans

are to have an inventory of finished products that equal 20% of the unit sales for the next

month.

Five pounds of materials are required for each unit produced. Each pound of material

costs $8. Inventory levels for materials

are equal to 30% of the needs for the next month.

Materials inventory on June 1 was 15,000 pounds.

Required:

a.

Prepare production budgets in units for July, August, and September.

b.

Prepare a purchases budget in pounds for July, August, and September, and give total

purchases in both pounds and dollars for each month.