Required:

a)Prepare a production budget in units for SuperStick for each of July, August, September and October.

b)Prepare a raw materials purchase budget in kilograms showing the quantity of D236 to be purchased for each of July, August and September.

Question #5 (20 minutes) Tony Corporation manufactures and distributes a number of products to retailers. One of these products, SuperStick, requires 4 kilograms of material D2336 in the manufacture of each unit. The company wants to plan raw material needs for the third quarter July, August and September. The company has the following inventory requirements to keep production and shipments moving: 1.Finished goods inventory on hand at the end of each month must be equal to 8,000 units plus 20% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 22,000 units. 2.Raw material inventory on hand at the end of each month must be equal to 40% of the following month's production needs for raw materials.The raw materials inventory on June 30 for D236 is budgeted to be 129,000 kilograms. 3. The company maintains no work in process inventories. Tony Corporation has the following budgeted sales for the selected six month period: Budgeted Sales in Units July August September October November December 60,000 75,000 105,000 53,000 30,000 15,000