Capp Corporation is a wholesaler of industrial goods. Data regarding operations follow: (not all of the information will be used)

Data for Sales and Cash Collections:

• Sales are budgeted at 3,300 for October, 3,500 for November, 3,600 for December, 3,400 for January, and 3,500 for February. The average selling price is $100 per unit.
• Collections are expected to be 60% in the month of sale, 39% in the month following the sale, and 1% uncollectible.
• The October beginning balance in the accounts receivable account is $120,000. All of it will be collected in October.

Additional Data for Merchandise Production:

(Note use the sales information above and the following data).

• The company desires an ending merchandise inventory equal to 30% of the following month's production.
• The beginning merchandise balance is 1,000 units.

Additional Data for Direct Material Purchases:

(Note use the sales information above and the following data).

• It takes 5 items per each finished unit. Each item of raw materials average cost is $10.
• The company desires an ending materials inventory equal to 20% of the following month's materials needed for production.
• The beginning materials balance is 3,300 items.
• Additional Data for Expected Cash Payments:
• 25% of the merchandise is paid in the month of purchase, with the remaining 75% paid in the month following the purchase.
• The October beginning balance in the accounts payable account is $125,000. All of it will be paid in October.

Required: a. Prepare the Production Budget for October and November.

b. Prepare a Direct Materials Budget for October and November.