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 companys 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:

1. The finished goods inventory on hand at the end of each month must equal 2,000 units of Supermix plus 25% of the next months sales. The finished goods inventory on June 30 is budgeted to be 20,250 units.

2. 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 30 is budgeted to be 111,375 cc of solvent H300.

3. The company maintains no work in process inventories.

A monthly sales budget for Supermix for the third and fourth quarters of the year follows.

	Budgeted Unit Sales
July	73,000
August	78,000
September	88,000
October	68,000
November	58,000
December	48,000

Required: 1. Prepare a 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. Complete this question by entering your answers in the tabs below. Required 1 Required 3 Prepare a production budget for Supermix for the months July, August, September, and October. Pearl Products Limited Production Budget July 73,000 21,500 94,500 20,250 August 78.000 September 88,000 October 68,000 Budgeted unit sales Add: Desired units of ending raw materials inventory Total needs Less: Units of beginning raw materials inventory Required production in units Required 1 Required 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 August September Third Quarter CC CC CC CC Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Total units of raw materials needed Units of raw materials to be purchased