Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters(cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company's products. The company is planning itsraw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales movingsmoothly, 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 25% of the next month'ssales. The finished goods inventory on June 30 is budgeted to be 13,250 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 forraw materials. The raw materials inventory on June 30 is budgeted to be 63,375 cc of solvent H300.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.BudgetedUnit Sales41,00046,00056,00036,00026,00016,000JulyAugustSeptemberOctoberNovemberDecemberRequired: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 forthe quarter in total. Complete this question by entering your answers in the tabs below.Required 1Required 3Prepare a production budget for Supermix for the months July, August, September, and October.Pearl Products LimitedProduction BudgetJulyAugustSeptemberOctoberBudgeted unit salesTotal needsRequired production in units< Required 1Required 3 >Required 1Required 3Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July, August, and September, and for the quarter intotal.Pearl Products LimitedDirect Materials BudgetJulyAugustSeptemberThird QuarterUnits of raw materials needed per unit of finished goodsUnits of raw materials needed to meet productionTotal units of raw materials neededUnits of raw materials to be purchased< Required 1Required 3 >

Required production in Units = Budgeted Unit sales + Desired Ending Inventory - Beginning Inventory…

Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 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 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 25% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 13,250 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 raw materials inventory on June 30 is budgeted to be 63,375 cc 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. Budgeted Unit Sales July August September October 41,000 46,000 56,000 36,000 26,000 16,000 November December 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.

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...