Help Save Exit Subm Pearl Products Limited of Shenzhen China

Help Save& Exit Subm 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 now is 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 r a. The finished goods inventory on hand at the end of each month must equal 3,000 unts of Supermix pls 25% of the next mo sales. The finished goods inventory on June 30 is budgeted to be 16.250 units b. The raw matèrials inventory on hand at the end of each \'s raw materials. The raw materials inventory on June 30 is budgeted to be 81,375 cc c. The company maintains no work in process inventories. month must equal one-half of the following month\'s production needs for of solvent H300 A monthly sales budget for Supermix for the third and fourth quarters of the year folilows. Budgeted Unit Sales 53,000 58,000 July August September 68,e00 October November December 48,000 38,000 28,000 Next > to search

Solution

Production Budget July August September October Total Sales 53000.00 58000.00 68000 48000.00 ADD : Closing Stock 17500.00 20000.00 15000.00 12500.00 LESS : Opening Stock 16250.00 17500.00 20000.00 15000.00 Production (Units) 54250.00 60500.00 63000.00 45500.00 Direct Material Purchase Budget July August September Production (Units) 54250.00 60500.00 63000.00 Material needed per unit 3.00 3.00 3.00 Production needs 162750.00 181500.00 189000.00 Add: Closing 90750.00 94500.00 68250.00 Less: Opening -81375.00 -90750.00 -94500.00 Material purchase 172125.00 185250.00 162750.00