DSP Products Inc $$\begin{array} { l l } \text { April } & \text { 2500 urits } \\\text { May } & 4000 \text { urits } \\\text { June } & 6800 \\\end{array}$$

question 38

Essay

DSP Products Inc.makes and sells boat tarps.The purchasing manager has prepared the production budget for the second quarter of 2009 as follows:
$$\begin{array} { l l } \text { April } & \text { 2500 urits } \\\text { May } & 4000 \text { urits } \\\text { June } & 6800 \\\end{array}$$
Production for both July and August is expected to be 7000 units each.Each completed unit of finished product requires 50 metres of a heavy-duty plastic material which costs $1.40 per metre.The company has determined that it needs 15 per cent of next month's raw material needs on hand at the end of each month.The company had 18 750 metres of plastic material on hand at the end of March.
It is the company's policy to pay for one-half of a month's direct materials purchases in the month of purchase and the remainder in the following month.
Required:
A. Prepare a direct matenals purchases budget for the second quarter of 2009.
B. Assuming all cash disbursements in the month of June will be for direct materials, prepare a cash disbursements budget for the month of June.

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Definitions:

Osmosis

The movement of water molecules through a semi-permeable membrane from a region of lower solute concentration to a region of higher solute concentration.

Lancet

A small, sharp, and typically pointed surgical instrument used for making small incisions or punctures.

Semipermeable

Describes a barrier or membrane that allows certain substances to pass through it while blocking others.

Cell Wall

A rigid layer outside the plasma membrane of the cells of plants, fungi, and some bacteria, providing structural support and protection.