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 16,250 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 81,375 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: July Budgeted Unit Sales 53,000 August 58,000 September 68,000 October 48,000 November 38,000 December 28,000 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 1300 to be purchased for July, August, and September, and for the quarter in total.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Vishnu 

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 16,250 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 81,375 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:
July
Budgeted
Unit Sales
53,000
August
58,000
September
68,000
October
48,000
November
38,000
December
28,000
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 1300 to be purchased for July, August, and September, and for
the quarter in total.
Transcribed Image Text: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 16,250 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 81,375 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: July Budgeted Unit Sales 53,000 August 58,000 September 68,000 October 48,000 November 38,000 December 28,000 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 1300 to be purchased for July, August, and September, and for the quarter in total.
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