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 3.000 units of Supermix plus 20% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 17.200 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 108,000 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 July August September October November December Budgeted Unit Sales 71,000 75,000 86,000 66,000 56,000 46,300 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 Required 1 Required 3 Prepare a production budget for Supermix for the months July August, September, and October. Pearl Products Limited Production Budget July September October August 76.000 86,000 66,000 71.000 18 200 20.200 16,200 14,200 Budgeted unit sales Add. Desired units of ending finished goods inventory Total needs Less Units of beginning finished goods inventory Required production in units 89 200 96.200 80.200 102 200 20,200 17,200 16.200 18.200 78,000 72,000 82000 64,000 Required 3 > total. Pearl Products Limited Direct Materials Budget July Required production in units of finished goods 72,000 Units of raw materials needed per unit of finished goods 3 Units of raw materiais needed to meet production 216.000 Add. Desired units of ending finished goods inventory 117.000 Total units of raw materials needed 333,000 Less Units of beginning raw materials inventory 108,000 Units of raw materials to be purchased 225.000 August 78,000 3 CC 234 000 123 000 357 000 117 000 240,000 OOOOOO September 82,000 30cc 246,000 96,000 342.000 123 000 219,000 lololololo Third Quarter 232,000 3cc 696,000 336,000 1,032,000 348,000 648,000 3