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Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters ( cc ) of solvent H 3 0
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters cc of solvent H 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:
The finished goods inventory on hand at the end of each month must equal units of Supermix plus of the next months sales. The finished goods inventory on June is budgeted to be units.
The raw materials inventory on hand at the end of each month must equal onehalf of the following months production needs for raw materials. The raw materials inventory on June is budgeted to be cc of solvent H
The company maintains no work in process inventories.
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