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Cost Accounting Problem (Simple)

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CoursHeroTranscribedText: Daisy Products Limited of Shenzhen, China, manufactures and distributes toys throughout Southeast Asia. Three cubic centimetres (cc) of solvent 080 are required to manufacture each unit of Fineclay, one ofthe com pany's products. The company is now planning raw materials needs for the third quarter, the quarter in which peak sales of Fineclay 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 1,800 units of Fineclay plus 15% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 6,000 units. b. The raw materials inventory on hand at the end of each month must be equal to one-half ofthe following month's production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 32,400 cc of solvent Q80. c. The company maintains no workinprocess inventories. A sales budget for Fineclay for the last six months ofthe year follows: Budget ed Sales in Units July 21,339 August 24,898 September 36,899 October 18,666 November 12,886 December' 6,893 2. This part of the question is not part of your Connect assignment. 3. Prepare a budget showing the quantity of solvent 080 to be purchased for July, August, and September, and for the quarter in total

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