Pearl Products Limited of Shenzhen, Chins, manufoctures and distributes toys throughout Southesst Asia. Three cubic centimeters cc of solvent are required to manufacture each unit of Supermix, one of the company's products. The company is planning its raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company hos the following inventory requirements:
a The finished goods inventory on hand at the end of each month must equal units of Supermix plus of the next month's soles. The finished goods inventory on June is budgeted to be units.
b The raw materials inventory on hand at the end of each month must equal onehalf of the following month's production needs for row materials. The raw materials inventory on June is budgeted to be of solvent
c The company maintsins no work in process inventories.
A monthly soles budget for Supermix for the third and fourth quarters of the year follows:
tabletableBudgetedUnit SalesJuly eaeAugust
