Direct Materials Budget Problem Yellowstone, Inc. makes and sells pet water dishes. Each pet water dish uses 3/4 pound of plastic. Budgeted production of pet water dishes in units for the next three months is as follows: Budgeted production (water dishes in units) July 35,000 August 40,000 September 45,000 The company wants to maintain monthly ending inventories of plastic equal to 15% of the following month's budgeted production needs. The cost of plastic is $1.50 per pound 1. Prepare a direct materials purchases budget for the month of May. Units to be produced Times: Direct materials per unit Total pounds needed for production Add: Desired ending direct materials (lbs) Total materials required Less: Beginning direct materials (lbs) Direct materials purchases Times: Cost per pound Total cost of direct materials purchases July August September