Please help me answer this question Pearl Products Limited of Shenzhen. China, m

Question

Please help me answer this question

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 now planning 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: The finished goods inventory on hand at the end of each month must be equal to 3.000 units of Supermix plus 20% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 10,000 units. The raw materials inventory on hand at the end of each month must be equal to one-half of the following month's production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 54.000 cc of solvent H300. The company maintains no work in process inventories. A sales budget for Supermix for the last six months of the year follows. Prepare a production budget for Supermix for the months July. August. September, and October. 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.

Explanation / Answer

Mercandise Purchase Budget July August September October Total Working November December Total Budgeted sales in units 35000 40000 50000 30000 155000 20000 10000 Add: Budgeted Closing Inventory 20% of next month sales S*.2+3000 units 11000 13000 9000 7000 7000 5000 Total needs 46000 53000 59000 37000 162000 25000 Less: Beginning Inventory 10000 11000 13000 9000 10000 7000 Required Unit Purchases 36000 42000 46000 28000 152000 18000 For July=40000*20%+3000=11000 same way to calculatefor other months Direct materail Budget July August September Total October Units of raw material needed to produce 36000 42000 46000 124000 28000 Add: Budgeted Closing Raw material Inventory 50% of next month production needs 21000 23000 14000 14000 9000 July=42000*50%=21000 Total needs 57000 65000 60000 138000 37000 same way to calculatefor other months Less: Beginning Raw Material Inventory 54000 21000 23000 54000 14000 Units of raw material to be produced 3000 44000 37000 84000 23000

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.