3. Schedule 3: Direct materials purchases budget (Assumes May sales equal April sales in units)

January February

Part K29 Part C30 Part K29 Part C30

Units produced............... 11,200 11,200 11,000 11,000

Dir. mat. per unit............ 2 3 2 3

Production needs...... 22,400 33,600 22,000 33,000

Desired EI......................... 6,600 9,900 8,160 12,240

Total needed............... 29,000 43,500 30,160 45,240

Less: BI............................. 6,720 10,080 6,600 9,900

Dir. mat. to purchase 22,280 33,420 23,560 35,340

Cost per unit................... $4 $7 $4 $7

Total purchase cost $ 89,120 $233,940 $ 94,240 $247,380

Where does the $6600 come from? Not sure how to calculate the desired ending inventory.