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 now planning 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 be equal to 4,000 units of Supermix plus 25% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 21,250 units. b. The raw materials inventory on hand at the end of each month must be equal to one- half of the following month's production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 105,375 cc of solvent H300. c. The company maintains no work in process inventories. A sales budget for Supermix for the last six months of the year follows. July August September October November December Budgeted Sales in Units 69,000 74,000 84,000 64,000 54,000 44,000 Required: 1. Prepare a production budget for Supermix for the months July, August, September, and October X Answer is complete but not entirely correct. Pearl Products Limited Production Budget July Budgeted unit sales 69,000 Add: Desired units of ending finished goods 19 na October August 74.000 25 non September 84.000 64,000 14 and Required: 1. Prepare a production budget for Supermix for the months July, August, September, and October Answer is complete but not entirely correct. October Pearl Products Limited Production Budget July Budgeted unit sales 69,000 Add: Desired units of ending finished goods inventory 19,500 Total needs 88,500 X Less: Units of beginning finished goods inventory 21,250 Required production in units 67,250 X August 74,000 25,000 September 84,000 17,000 101,000 X 22,000 79,000 99,000 19,500 X 76,500 64,000 14,500 78,500 17,000 X 61,500 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. X Answer is complete but not entirely correct. September Pearl Products Limited Direct Materials Budget July August Units of raw materials needed to meet production 201,750 229,500 Add: Desired units of ending raw materials inventory 118,500 118,500 Total units of raw materials needed 316,500 348,000 Less: Units of beginning raw materials inventory 105,375 114,750 Units of raw materials to be purchased 211,125 X 233,250 Third Quarter 668,250 237,000 92,250 329,250 OOO 325,500 993,750 X 338,625 X 655, 125 118,500 210.750