four months of the year is as follows:

View the production schedule.

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.

Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget.

Austen Industries

Direct Materials Budget

For the Months of January through March

Units to be produced

Multiply by: Quantity of direct materials needed per unit

Quantity needed for production

Plus: Desired ending inventory of direct materials

Total quantity needed

Production schedule