Wehner Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 15 ounces of plastic costing $0.10 per ounce. Wehner molds the plastic into the proper shape. The company has budgeted production of the housings for the next 4 months as follows:

Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 24% of the following month’s production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy.

Required:
Prepare a direct materials purchases budget for September, October, and November, showing purchases in units and in dollars for each month and in total.

Transcribed Image Text:

September October November December Units 3,500 4,400 4,800 7,100