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Pearl Products Limited of Shenzen, China manufactures and distributes toys throughout South East Asia. Three cubic centimeters ( cc ) of solvent H 3 0

Pearl Products Limited of Shenzen, 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 other companys products. The company is planning its raw materials needs for the third quarter, the quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has had 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 20% of the next months sales. The finished goods inventory on June 30 is budgeted to be 15,400 units.
B. The raw materials inventory on hand at the end of each month must equal one-half of the following months production needs for raw materials. The raw materials inventory on June 30is budgeted to be 102,000 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:
Budget Unit Sales
July 67,000
August 72,000
September 82,000
October 62,000
November 52,000
December 42,000
Required:
Prepare a production budget for Supermix for the months July, August, September, and October.
Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for Jule, August, and September, and for the quarter in total.
Prepare a production budget for Supermix for the months July, August, September, and October.

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