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Production and Purchases Budgets Drainage Solutions Culverts produces small culverts for water drainage under two-lane dirt roads. Budgeted unit sales for the next several months are:

Month	Sales
September	2,500
October	2,000
November	1,300
December	1,000

At the beginning of September, 625 units of finished goods were in inventory. During the final third of the year, as road construction declines, plans are to have an inventory of finished goods equal to 25 percent of the following month's sales. Each unit of finished goods requires 600 pounds of raw materials at a cost of $5 per pound. Management wishes to maintain month-end inventories of raw materials equal to 50 percent of the following month's needs. Five hundred thousand pounds of raw materials were on hand at the start of September.

Required a. Prepare a production budget for September, October, and November. Do not use a negative sign with your answers.

Drainage Solutions Culverts
Production Budget
For the Months of September, October, and November
	Sept.	Oct.	Nov.	Dec.
Budgeted sales	Answer	Answer	Answer	Answer
Plus desired ending inventory	Answer	Answer	Answer
Total inventory requirements	Answer	Answer	Answer
Less beginning inventory	Answer	Answer	Answer
Budgeted production	Answer	Answer	Answer

b. Prepare a purchases budget in units and dollars for September and October. Do not use a negative sign with your answers.

Drainage Solutions Culverts
Purchases Budget
For the Months of September and October
	Sept.	Oct.	Nov.
Units (in pounds):
Production requirements	Answer	Answer	Answer
Plus desired ending inventory	Answer	Answer
Total inventory needs	Answer	Answer
Less beginning inventory	500,000	Answer
Budgeted purchases in pounds	Answer	Answer
Dollars:
Budgeted purchases:	Answer	Answer

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