Exercise 20-6 Manufacturing: Direct materials budget LO P1 Rida, Inc., a manufacturer in a seasonal industry, is preparing its direct materials budget for the second quarter. It plans production of 240,000 units in the second quarter and 52,500 units in the third quarter. Raw material inventory is 43,200 pounds at the beginning of the second quarter. Other information follows: Direct materials Each unit requires 0.60 pounds of a key raw material, priced at $175 per pound. The company plans to end each quarter with an ending inventory of materials equal to 30% of next quarter's budgeted materials requirements. Prepare a direct materials budget for the second quarter. RIDA INC. Direct Materials Budget Second Quarter Units to be produced Materials requirement per unit Materials needed for production (pounds) Budgeted ending inventory (pounds) Total materials requirements (pounds) Beginning inventory (pounds) Materials to be purchased (pounds) Material price per pound Budgeted cost of direct materials purchases 240,000 units pounds pounds pounds pounds pounds pounds