The Pirate Corporation sells toddler pirate beds. The company has projected sales for the next four-month period as follows:

Month Unit Sales

August 21,000

September 15,000

October 18,000

November 12,000

There were 4,200 units of finished goods in inventory at the start of August. The company has a target ending inventory policy to keep 25% of the next month sales in finished goods inventory. Each pirate bed requires 6 pounds of plastic and 2.5 yards of fabric for the sail. Each pound of plastic costs $5.00 and each yard of fabric costs $2.50. The company tries to keep 50,000 pounds of plastic and 25,000 yards of fabric on hand in ending materials inventory for the following month. On August 1 the company had 38,000 pounds of plastic and 21,000 yards of fabric.

1. Prepare a Production Budget for August.

2. Prepare a Materials Purchases Budget for August. Include both the physical units of plastic and fabric, as well as the budgeted costs for each material.