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 2,500 October 2,000 November 1,300 December 1,000

At the beginning of September, 625 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 Answer Answer Answer Answer Plus desired ending inventory Answer Answer Answer Total inventory requirements Answer Answer Answer Less beginning inventory Answer Answer Answer Budgeted production Answer Answer Answer

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 Answer Answer Answer Plus desired ending inventory Answer Answer Total inventory needs Answer Answer Less beginning inventory 500,000 Answer Budgeted purchases in pounds Answer Answer Dollars: Budgeted purchases: $Answer $Answer