Pearl Products Limited of Shenzhen, China, manufactures and distributes toys thr

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 a. The finished goods inventory on hand at the end of each month must be equal to 2,000 units of Supermix plus 25% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 14,250 units b. 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 68,000 cc of solvent H300 The company maintains no work in process inventories C. A sales budget for Supermix for the last six months of the year follows July August September October November December Budgeted Sales in Units 49,000 54,000 64,000 44,000 34,000 24,000 Required: 1. Prepare a production budget for Supermix for the months July, August, September, and October Pearl Products Limited Production Budget July August September October Budgeted unit sales Total needs Required production in units

Explanation / Answer

Solution:-

Production Budget

July August Sep Oct Bdt Unit Sales (i) 49000 54000 64000 44000 Ending Inventory Required (ii) 15500 18000 13000 10500 Total Unit need (i + ii) 64500 72000 77000 54500 Opening Inventory (iii) 14250 15500 18000 13000 Production Required (i +ii - iii) 50250 56500 59000 41500

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

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