Electro Company budgets production of 680,000 transmissions in the second quarter and 755,000 transmissions in the third quarter. Each transmission requires 0.8 pounds of a key raw material. Electro Company aims to end each quarter with an ending inventory of direct materials equal to 20% of next quarters budgeted materials requirements. Beginning inventory of this raw material is 108,800 pounds. Direct materials cost $1.93 per pound. Prepare a direct materials budget for the second quarter.

ELECTRO COMPANY Direct Materials Budget Second Quarter Budgeted production (units) 680,000 units Materials needed for production (lbs.) Total materials requirements (lbs.) Materials to be purchased (lbs.) Budgeted cost of direct materials purchases