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Tonga Toys manufactures and distributes a number of products to retailers. One of these products, Playclay, requires five pounds of material A135 in the manufacture of each unit. The company is now planning raw materials needs for the third quarterJuly, August, and September. Peak sales of Playclay occur in the third quarter of each year. To keep production and shipments 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 3,000 units plus 35% of the next months sales. The finished goods inventory on June 30 is budgeted to be 17,350 units.
b.	The raw materials inventory on hand at the end of each month must be equal to one-half of the following months production needs for raw materials. The raw materials inventory on June 30 for material A135 is budgeted to be 111,250 pounds.
c.	The company maintains no work in process inventories.

A sales budget for Playclay for the last six months of the year follows.

	Budgeted Sales in Units
July	41,000
August	51,000
September	71,000
October	36,000
November	21,000
December	11,000

Required:
1.	Prepare a production budget for Playclay for the months July, August, September, and October. (Input all amounts as positive values. Do not round intermediate calculations.)

Playclay Production Budget
	July	August	September	October
Budgeted sales
(Click to select)AddDeduct: (Click to select)Beginning inventoryEnding inventory
Total needs
(Click to select)DeductAdd: (Click to select)Beginning inventoryEnding inventory
Required production

3.	Prepare a direct materials budget showing the quantity of material A135 to be purchased for July, August, and September and for the quarter in total. (Input all amounts as positive values. Do not round intermediate calculations.)

Playclay Direct Materials Budget
	July	August	September	Third Quarter
Production needs
(Click to select)AddDeduct: (Click to select)Ending inventoryBeginning inventory
Total Material A135 needs
(Click to select)DeductAdd: (Click to select)Beginning inventoryEnding inventory
Material A135 purchases

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