70.2K

Verified Solution

Link Copied!

Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout Southeast Asia: Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit or Supermix, one of the company's products. The company is planning its raw meterials need's 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 ot 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 15,250 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 row materials inventory on June 30 is budgeted to be 69.375cc of solvent H30O c. The company maintains no work in process inventories. A monthly sales budget for Supermix for the third and fourth quarters of the year follows. 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 & Explanation Solved by verified expert

See Answer