Stevens Company manufactures electronic components used in automobile manufacturing. Each component uses two raw materials, Geo and Clio. Standard usage of the two materials required to produce one finished electronic component, as well as the current inventory, are shown below.

Stevens forecasts sales of 20,000 components for each of the next two production periods. Company policy dictates that 25% of the raw materials needed to produce the next period’s projected sales be maintained in ending direct materials inventory.
Based on this information, what would the budgeted direct materials purchases for the coming period be?

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Standard Material Per Unit Price Current Inventory Geo.... Clio.. 2.0 pounds $15/lb. 5,000 pounds 1.5 pounds $10/lb. 7,500 pounds