Galactic Incorporated manufactures flying drone toys. Sales units for January, February, March, April, and May were 440, 420, 492, 452, and 520 respectively.

Required:

1. The companys policy for ending finished goods is 25 percent of next month's sales. Determine production budget for the first quarter.
2. The drone toy includes 2 LED lights, which cost $15 each. The company requires ending direct materials to be 20 percent of next month's materials requirement. Determine direct materials purchases budget with respect to LED lights for the first quarter.