E9-21A Direct materials budget (Learning Objective 2) Sacco Industries manufactures a popular interactive stuffed animal for children that re- quires three computer chips inside each toy. The company pays $2 for each computer chip. To help to guard against stockouts of the computer chip, Sacco Industries has a policy stating that the ending inventory of computer chips should be at least 25% of the following month's production needs. The production schedule for the first four months of January February March April Stuffed animals to be produced 5,600 4,800 4,200 4,000 Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget