C D E F G H 2. The Bakery at the Lake produces organic bread that is sold by the loaf. Each loaf requires 1/2 of a pound of flour. The bakery pays $2.00 per pound of organic flour used in its loaves. The bakery expects to produce the following number of loaves in each of the upcoming four months: July August September 1,560 loaves 1,840 loaves 1,740 loaves October 1,480 loaves The bakery has a policy that it will have 20% of the following month's flour needs on hand at the end of each month. At the end of June, there were 156 pounds of flour on hand. Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter. The Bakery at the Lake The Bakery at the Lake Direct Materials Budget For the Months of July through September Units to be produced Multiply by: Pounds of flour needed per unit Quantity (lbs.) needed for production Plus: Desired end inventory of DM (20% of the amount needed for next month's production) Total quantity (lbs.) needed Less: Beginning inventory of DM Quantity (lbs.) to purchase Multiply by: Cost per pound Total cost of DM purchases July August Sept. Quarter