Lubriderm Corporation Has the Following Budgeted Unit Sales for the Next

question 41

Essay

Lubriderm Corporation has the following budgeted unit sales for the next six-month period:
$$\begin{array} { l r } \text { Month } & \text { Unit Sales } \\\hline \text { June } & 90,000 \\\text { July } & 120,000 \\\text { August } & 210,000 \\\text { September } & 150,000 \\\text { October } & 180,000 \\\text { November } & 120,000\end{array}$$ There were 30,000 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 $8.Inventory levels for materials are equal to 30% of the needs for the next month.Materials inventory on June 1 was 15,000 pounds.
Required:
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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Definitions:

Deferred Payment

A payment postponed to a future date or a series of payments made over time after the purchase or agreement.

Exchange Rate

The rate at which one currency can be exchanged for another, influencing international trade and investments.

Exchange Rate Risk

The potential for loss due to fluctuating foreign exchange rates affecting international financial transactions.

Forward Currency

A contract to exchange a specific amount of one currency for another at a future date and at a predetermined rate, used to hedge against currency risk.