DIRECT MATERIALS BUDGET AND SCHEDULE OF CASH COLLECTIONS January Production February Production March Production April Production 150,000 180,000 100,000 120,000 February March Quarter DIRECT MATERIALS BUDGET January Required production (units) Pounds of material per unit Pounds of material needed to meet production Add: desired pounds of ending raw materials inventory Total pounds of raw materials needed Less: pounds of beginning raw materials inventory Pounds of raw materials to be purchased Cost of raw materials per pound Cost of raw materials to be purchased Cost of raw materials per pound Beginning raw materials inventory (pounds) Pounds of raw materials (per unit) Desired ending raw materials inventory (pounds) $5 40,000 4 20% Beginning accounts payable A/P paid in January (%) A/P paid in February (%) $600,000 70% 30% March Quarter SCHEDULE OF EXPECTED CASH DISBURSEMENTS FOR MATERIALS PURCHASES January February Beginning Accounts Payable Cash for January Purchases Cash for February Purchases Cash for March Purchases Total Cash Disbursements for materials Payment Schedule (%) Month of purchase Month after purchase Second month after purchase 25% 60% 15%