Electro Company budgets production of 670,000 electric panels in the second quarter and 740,000 electric panels in the third quarter. Each panel requires 0.80 pound of direct material at a cost of $2.00 per pound. The company desires to end each quarter with an ending inventory of this material equal to 20% of next quarter's budgeted materials requirements. Beginning inventory of this material is 107,200 pounds. Prepare a direct materials budget for the second quarter. ELECTRO COMPANY Direct Materials Budget Second Quarter 670,000 units Units to produce Materials required per unit Materials needed for production (pounds) Add: Desired ending materials inventory Total materials required Less: Beginning materials inventory Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases 0.80 pounds 536,000 pounds