Question

Lubriderm Corporation has the following budgeted unit sales for the next six-month period: Month Unit Sales...

Lubriderm Corporation has the following budgeted unit sales for the next six-month period:

Month Unit Sales

June 130,000

July 100,000

August 160,000

September 200,000

October 140,000

November 180,000

There were 26,000 units of finished goods in inventory at the beginning of June. Plans are to have an inventory of finished products that equal 20% of the unit sales for the next month.

Five pounds of materials are required for each unit produced. Each pound of material costs $20. Raw material inventory levels for materials are equal to 30% of the production needs for the next month. Materials inventory on July 1 was 168,000 pounds.

A.Prepare production budgets in units for July, August, and September.

B. Prepare a purchases budget in pounds for July, August, and September, and give total   purchases in both pounds and dollars for each month.

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