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 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 following inventory requirements: a. The finished goods inventory on hand at the end of each month must equal 4,000 units of Supermix plus 25% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 15,250 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 69,375 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. July August September October November December Budgeted Unit Sales 45,000 50,000 60,000 40,000 30,000 20,000 Required: 1. Prepare o production budget for Supermix for the months July, August September, and October 3. Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July, August, and September, and for the quarter in total Pearl Products Limited Direct Materials Budget July Required production in units of finished goods 46,250 Units of raw materials needed per unit of finished goods 3 cc Units of raw materials needed to meet production 138,750 Add: Desired units of ending raw materials inventory 78,750 Total units of raw materiais needed 217,500 Less: Units of beginning raw materials inventory 69,375 Units of raw materials to be purchased 148,125 September 55,000 3 cc 165,000 Third Quarter 153,750 3 CC 461,250 August 52,500 3 CC 157,500 82,500 240,000 78,750 161,250 82,500 69,375