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 now is 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 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 18,250 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 87,375 cc of solvent H300. 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 57,000 August 62,000 September 72,000 October 52,000 November 42,000 December 32,000 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 Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 3 October Prepare a production budget for Supermix for the months July, August, September, and October. Pearl Products Limited Production Budget July August September Budgeted unit sales 57,000 62,000 72,000 Less: Desired units of ending raw materials 11,000 13,000 inventory 9,000 Total needs 96,200 102,200 Add: Units of beginning raw materials inventory 17,200 18,2003 20,200 Required production in units 72,000 78,000 82,000 52,000 3,000 80,200 16,200 X 64,000 Complete this question by entering your answers in the tabs below. 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 cu total. & Pearl Products Limited Direct Materials Budget July 72,000 Units of raw materials needed per unit of finished goods 3 Units of raw materials needed to meet production 216,000 Add: Desired units of ending raw materials 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 3 August 78,000 3 234,000 123,000 357,000 117.000 240,000 $ September 82.000 3cc 246,000 3 96,000 342,000 123,000 $ 219,000 Third Quarter 232,000 3 696,000 96,000 792,000 108,000 684,000 >
