Dallas Industries has adopted the following production budget for the first 4 months of 2014.

Month Units Month Units January 10,000 March 5,000 February 8,000 April 4,000 Each unit requires 2 pounds of raw materials costing $2 per pound. On December 31, 2013, the ending raw materials inventory was 4,000 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month’s production requirements.

Instructions Prepare a direct materials purchases budget by month for the first quarter.

AppendixLO1