Dewitt Industries has adopted the following production budget for the first 4 months of 2012

Month	Units	Month	Units
January	10,000	March	5,000
February	8,000	April	4,000

Each unit requires 3 pounds of raw materials costing $2 per pound. On December 31, 2011, the ending raw materials inventory was 9,000 pounds. Management wants to have a raw n=materials inventory at the end of the month equal to 30% of the next months production requirements.

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

Ortiz Companys sales budget projects unit sales of part 198Z of 10,000 units in January, 12,000 units in February, and 13,000 units in March. Each unit of part 198Z requires 2 pounds of materials , which cost $3 per pound. Ortiz Company desires its ending raw materials inventory to equal 40% of the next months production requirements, and its ending finished goods inventory to equal 25% of the next months expected unit sales. These goals were met at December 31, 2011.

Prepare a production budget for January and February 2011.

Prepare a direct material budget for January 2011.