Hoffman Industries manufactures a popular interactive stuffed animal for children that requires three computer chips inside each toy. The company pays $$1$ for each computer

chip. To help to guard against stockouts of the computer chip, Hoffman Industries has a policy that states that the ending inventory of computer chips should be at least $25\%$ of the

following month's production needs. The production schedule for the first four months of the year is as follows:

$($Click the icon to 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.

Hoffman Industries

Direct Materials Budget

For the Months of January through March

Data table