50.1K

Verified Solution

Link Copied!

Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asla. Three cubic centimeters

$($cc$)$ of solvent $H300$ are required to manufacture each unit of Supermix, one of the company's products. The company now is planning

raw materlals needs 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 at the end of each month must equal $3,000$ units of Supermix plus $20\%$ of the next month's

sales. The finished goods Inventory on June $30$ is budgeted to be $17,200$ units.

b$.$ The raw materlals inventory on hand at the end of each month must equal one$-$half of the following month's production needs for

raw materlals. The raw materlals inventory on June $30$ is budgeted to be $108,000cc$ of solvent $H300.$

c$.$ The company maintains no work in process Inventorles.

A monthly sales budget for Supermix for the third and fourth quarters of the year follows.

Required:

Prepare a production budget for Supermix for the months July, August, September, and October.

Prepare a direct materlals budget showing the quantlty of solvent H$3$OO to be purchased for July, August, and September, and for

the quarter in total.

Complete this question by entering your answers in the tabs below.

Prepare a production budget for Supermix for the months July, August, September, and October:

Answer & Explanation Solved by verified expert

See Answer