Production and Purchases Budgets Drainage Solutions Culverts produces small culverts for water drainage under two-lane dirt roads. Budgeted unit sales for the next several months are:

Month	Sales
September	2,300
October	1,800
November	1,100
December	800

At the beginning of September, 575 units of finished goods were in inventory. During the final third of the year, as road construction declines, plans are to have an inventory of finished goods equal to 25 percent of the following month's sales. Each unit of finished goods requires 600 pounds of raw materials at a cost of $5 per pound. Management wishes to maintain month-end inventories of raw materials equal to 50 percent of the following month's needs. Five hundred thousand pounds of raw materials were on hand at the start of September.

Required a. Prepare a production budget for September, October, and November. Do not use a negative sign with your answers.

Drainage Solutions Culverts
Production Budget
For the Months of September, October, and November
	Sept.	Oct.	Nov.	Dec.
Budgeted sales
Plus desired ending inventory
Total inventory requirements
Less beginning inventory
Budgeted production

b. Prepare a purchases budget in units and dollars for September and October. Do not use a negative sign with your answers.

Drainage Solutions Culverts
Purchases Budget
For the Months of September and October
	Sept.	Oct.	Nov.
Units (in pounds):
Production requirements
Plus desired ending inventory
Total inventory needs
Less beginning inventory	500,000
Budgeted purchases in pounds
Dollars:
Budgeted purchases: